What MLTA and MRTA are
MRTA (Mortgage Reducing Term Assurance) is a policy whose sum assured reduces over time, roughly in line with your outstanding housing loan. If you pass away or become totally and permanently disabled, it pays the bank to settle the loan.
MLTA (Mortgage Level Term Assurance) is a life policy with a sum assured that stays level for the term. The payout settles the outstanding loan, and depending on the plan, any balance goes to your beneficiaries.
Both are designed so your family can keep the house instead of having to sell it to clear the loan.
MLTA vs MRTA side by side
| MRTA | MLTA | |
|---|---|---|
| Sum assured | Reduces over the loan term | Stays level for the policy term |
| Premium | Lower. Usually a single premium financed into the loan | Higher. Paid as a single premium or regularly, depending on the plan |
| Payout goes to | Mainly the bank | Pays off the loan, with any balance to your beneficiaries (subject to plan terms) |
| If you refinance or sell | Usually tied to that loan and bank | Generally stays with you and can protect a new loan |
| After the loan is paid off | Cover usually ends | Cover can continue to the end of the term |
| Cash value | Usually none | Some plans have a cash or surrender value |
Features vary between insurers and banks, so always read the specific policy terms.
Which one suits you?
- MRTA may suit you if you want the lowest upfront cost and expect to keep the same loan for its full term.
- MLTA may suit you if you might refinance, sell and upgrade, or want the cover to continue as family protection after the loan ends.
Check whether your bank requires mortgage insurance for your loan and what it accepts. Also check whether you already have enough life insurance to clear the loan, because existing cover can sometimes be used instead.
MRTT and MLTT: the takaful versions
MRTT (Mortgage Reducing Term Takaful) and MLTT (Mortgage Level Term Takaful) are the Shariah-compliant equivalents of MRTA and MLTA. They work the same way: MRTT’s cover reduces with the loan, while MLTT’s cover stays level.
They are common with Islamic home financing, which many non-Muslims also take because of its terms. Non-Muslims can buy MRTT or MLTT, and some Islamic financing requires takaful cover, so ask the bank what it accepts before choosing between conventional and takaful mortgage protection.
Debt protection beyond the house
A housing loan is often not the only debt. A debt protection plan looks at everything your family would inherit:
- housing and car loans,
- personal loans and credit cards,
- business loans you have guaranteed personally.
Lulu adds these up with you and checks whether your existing policies would clear them, so your family inherits the home, not the debt.
Don’t forget the building
MLTA and MRTA protect the loan if something happens to you. To protect the house itself against fire, flood and storm, you need houseowner fire insurance, which banks normally require for landed properties.