M.L.T.A.

Hi, is me again. For your information, I had an English persuasive presentation this afternoon. I did it quite poorly. I considered it as poor as the presentation couldn't even convince myself. I couldn't spur up the mood of the audiences. Due to this, I treated it as a failure. Somehow, I managed to get high marks. I got 9 upon 10 marks for all the assessment criteria, namely delivery, language, visual aids, content and overall impression. Wasn't it high? This was unexpected as I just could give myself a maximum of 70 marks.

Maybe I met my Luckygirl this morning. I was taking my pendrive outside the computer laboratory when I met her. She wished me good luck, all the best and wanted me to "add oil". Actually, I felt nothing at that moment, but it stroke me during my presentation. I forgot some of my speech but I still able to get such a high mark and remarkable comments from my tutors, Mr Johnny. I think, this is inevitable related to her. Thanks ya, if you read my post here.

Okay, back to the topic here. My presentation's title was M.L.T.A.. What is that? It is a type of Mortgage Life Insurance. It stands for Mortgage Level Term Assurance. It helps us to pay off the outstanding loan amount in the event that we die or suffer total and permanent disability. If you are going to borrow money to acquire a property, then you are inevitable to buy this but the bankers usually or almost 100% will ask you to buy M.R.T.A. (Mortgage Reducing Term Assurance) instead. Why? What are the differences between both policies?

This is because M.R.T.A. is bought in one lump sum. The bankers don't need to worry whether you default the payment or not as you are required to pay in one lump sum. If you can't afford to pay at the beginning, then the bankers will be happier since they can ask you to finance it into your loan, they can earn more interest from it. See, how cunning the bankers are. So, please don't fall into the traps of bankers after reading this post. The premiums of M.L.T.A. are paid monthly, quarterly, semi-annually or yearly and the total amount of premiums paid is much more higher than the premiums of M.R.T.A.. Are you thinking that I am trapping you and inducing you to do a stupid thing? Be patient, let me explain more to you.

Yes, you pay more for M.L.T.A. but the premiums are refundable to you at maturity date! Yes, please believe me, they are refundable to you if no compensation is claimed. With M.R.T.A., the premiums are burnt at maturity date, you get nothing from it. M.L.T.A. is transferable whenever you purchase a new property or refinance your loan or transfer it to your son. What you need to do is just adjusting the sum assured to match your new loan as many times as you like. Take note, you only purchase once, with the same sum assured, you don't have to prove your health condition again. However, you have to buy a new M.R.T.A. again and again whenever you buy a new property.

Besides, M.L.T.A. provides full protection. Let's say your loan is RM300,000. M.L.T.A. pays you RM300,000 no matter how many years from the date of purchase. M.R.T.A. provides reducing protection to you which means that the protection is gradually dropping year after year. Let's assume something bad happens to you in the 20th year and the outstanding loan amount is RM100,000. M.L.T.A. pays you RM300,000. You just take the RM100,000 to pay back to bank and keep the remaining RM200,000. With M.R.T.A., it just pays you RM100,000 if the Base Lending Rate (B.L.R.) remains the same. Nevertheless, if B.L.R. increases, then M.R.T.A. is insufficient to cover the balance due as the loan amount owed will be increased as well. Then, imagine, you are disabled now but the insurance policy that you bought can't help you to repay the loan balance, how are you going to deal the insufficient portion? Are you going to finance with bankers again or from loan sharks? Don't forget, the bankers will chase after your family members in case you are handicapped. What if your family members are low income earners or even don't have any income?

These were the three points that I presented today and actually, there are many more points. If you are interested, you can 'google' it and have a more knowledge on it because I'm sure you will acquire your own house one day. Bear in mind, choose the most suitable policy and be a wise consumer!

Why I know this so much since I am still young? I knew it from Hong Leong Assurance. They introduced me this policy and I used their points and what I had heard from them to present it to my tutor and my classmates. Hopefully they understood what I presented.