Mortgage Reducing Term Assurance | Mortgage Insurance Singapore

Insurance | Mortgage Insurance

What if you are living on private property?

In Singapore, private properties like bungalows, condos or executive apartments cost you a fortune. For which you have to dole out huge sums along with loans from the bank. It is a mentally and financially stressful activity, which one has to undergo. With such high stakes involved, you want that your family can live peacefully in case of any untoward incident. The incident could be your death or permanent disability when your income takes a beating. If you are a sole earning member then how would your family bear the burden of repaying the debt. To avoid such a situation, it is recommended that you take a Mortgage Reducing Term Assurance (MRTA) / Decreasing Term Rider.

Mortgage Reducing Term Assurance (MRTA)

In Singapore, mortgage insurance is also known as a Mortgage Reduced Term Assurance (MRTA) as the sum assured is gradually reduced as the housing loan gets paid off every month. … For private property and executive condominium owners, it is not compulsory to take up mortgage insurance. But it is essential to save your family from any trouble in future in case of any untoward incident.

The higher price of private residential properties can be a more compelling reason to take it up, especially if the mortgage loan can become a potential financial burden.

If you are confused about taking mortgage insurance as you view it as an additional burden in your financial scheme of things, then you should ask yourself these questions:

Can my family repay the debt when I am unable to do so? No! Then this is perhaps one of the biggest deciding factors on whether you should take up the MRTA. The last thing you want is for your family to worry about repaying the monthly mortgage if you become are unable to repay or service the loan in future.

Common Questions on MRTA

How much would my insurance cost me? MRTA can be packaged together with other insurance coverage options that are quite similar to life insurance. It can include supplementary benefits such as protection against disability and critical illness. Taking out an MRTA, in this case, may help you save on your total insurance costs.

What will happen if I move on to a new property? If you are considering a future upgrade from one property to another in the future, taking up an MRTA could be worth your while. You can transfer your remaining insurance coverage to a new property so that you do not need to take up new mortgage insurance. The premium amount may increase though, depending on the sum assured.

Consider these, if you feel that taking mortgage insurance is an expensive proposition, there are plans offered by insurers  which refund your premiums at the end of the policy term if no claims were made.

Thus, making it a win-win situation!


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