What
is Mortgage Reduced Term Assurance?
A Mortgage Reduced Term Assurance (short for MRTA) is also
called Decreasing Term Life Insurnace (short for DTLI), it is one kind
of term life insurance.
A Mortgage Reduced Term Assurance provides life insurance coverage
for a specific period of time. Presently, one year to thirty five years are
the periods one can buy decreasing term life insurance over. If the insured
dies during the period the insurance is in force, the insurance company
pays off the face value of the policy. If the insured lives longer than the
term of the policy, the policy is no longer in effect. Nothing is paid.
Mortgage
Reduced Term Assurance, or mortgage protection life insurance,
as it is commonly known, has a sum assured which reduces each year (or
possibly each month) by a stated amount, decreasing to nil at the end of
the term. It is normally used to cover a reducing debt, such as the capital
outstanding on a house purchase mortgage, with the sum assured being linked
to the reduction in the capital outstanding under the loan.
Cheap
decreasing term life insurance
Although
the cover decreases each year, the premium remains constant. Premiums are
sometimes payable for a shorter period than the policy term itself, because
otherwise there would be a temptation for the assured to lapse the policy
in the last year or two, when the sum assured has reduced to a
comparatively low level. Premiums for decreasing term life insurance are
either slightly cheaper than for level term assurance for the same initial
sum assured and term – or the same, but payable for a shorter period.
FOR
HDB owners
1. How much must I be insured under Home Protection
Scheme (HPS)?
2. How is the HPS premium calculated?
3.How much is the premium for my housing loan?
4.Where to Buy?
FOR
PRIVATE PROPERTY OWNERS
5. Is this insurance compulsory for me?
6. How much protection should I insured?
7. Where to buy?
8. Get a quote from all major insurance companies
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FOR
HDB owners
If you purchase a HDB flat, either
from HDB, or from resale market, you could purchase HPS (Home Protection
Scheme) from CPF board by using your CPF. You could purchase from private
insurance companies as well.
It is compulsory for HDB owners if you are planning to use any part of CPF
1. How much must I be insured under Home Protection Scheme
(HPS)?
Your share of the HPS cover should at least match the proportion of the
monthly housing instalment which is payable with your CPF savings and/or
cash.
If you are the only person paying the monthly housing instalments, you
should be insured for 100% of the loan.
If you are paying 80% of the monthly housing instalments, and your co-owner
the remaining 20%, you should be insured for 80% of the loan and your
co-owner, 20%.
Example:
Monthly housing instalment = $ 1,500. You are using $1,000 from your CPF
and $200 cash, while your co-owner is paying $300 from her CPF to service
the loan.
Your share of the cover should be at least:
$1,200 / $1,500 x 100% = 80%
Your co-owner's share of the cover should be at least:
$300 / $1,500 x 100% = 20%
Note: The total share of the cover per household should add up to at least
100%.
2. How is the HPS premium calculated?
The premium is calculated based on the following factors:
- Outstanding housing loan on the flat
- Loan repayment period
- Type of loan (concessionary or market rate)
- Sex and age of the member
Premiums are generally higher for loans of larger amounts or longer
repayment periods. The premiums would be lower for younger persons and
females.
3.How much is the premium for my housing loan?
To calculate your HPS premium, clickHERE
4.Where to Buy?
If you are planning to buy from private insurnce companies,
please refer to "for private property owners".
If you would like to purchase from CPF board, you could login into your CPF
account online, under "My request", then fill up information
needed.
See an HPS online demo, click HPS
If you like to know how to login your CPF account, Click How to Login CPF account
FOR
PRIVATE PROPERTY OWNERS
5. Is this insurance compulsory for me?
No, it is not compulsory. However, we strongly recommend you to consider
for your own benefits.
6. How much protection should I insured?
There are many ways you could consider when come to the amount insured.
First, you could consider to insure full amount for single life. Second,
you could consider to insure as joint life. And Third you could buy 50%.
7. Where to buy?
Private insurance companies like AIA, Prudential, NTUC, Great Eastern,
ManuLife and other general insurance companies provide mortgage reduced
term insurance.
8. Get a quotation from all major insurance companies |
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