Term Life

AIA Mortgage Reducing Term Assurance: Your Complete Guide to Protecting Your Home and Family

Are you a homeowner in Singapore? Have you ever wondered what would happen to your family and your home if something unexpected happened to you? That's where AIA Mortgage Reducing Term Assurance (MRTA) comes in. Let's explore how this important insurance can give you peace of mind and financial security.

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What is AIA Mortgage Reducing Term Assurance?

AIA Mortgage Reducing Term Assurance is a type of insurance designed specifically for homeowners with a mortgage . Here's what makes it special:

  1. It pays off your remaining home loan if you pass away, become totally and permanently disabled, or are diagnosed with a terminal illness.
  1. The coverage amount decreases over time, matching the reducing balance of your home loan.
  1. It's usually more affordable than other types of life insurance because the coverage decreases.

Key Features of AIA Mortgage Reducing Term Assurance

Tailored Coverage

The insurance amount matches your outstanding home loan.

Affordable Premiums

Generally lower cost compared to other life insurance products.

Flexible Terms

You can choose the policy term based on your loan tenure.

Joint-Life Option

Available for co-owned properties.

Additional Riders

You can add extra coverage like critical illness protection.

Why is Mortgage Insurance Important?

Imagine this: You've just bought your dream home in Singapore. It's perfect for your family, but it comes with a big mortgage. Now, what if something happened to you? Without mortgage insurance:

  1. Your family might struggle to pay the mortgage.
  1. They could be forced to sell the home or face foreclosure.
  1. Your loved ones could lose their home during an already difficult time.

With AIA Mortgage Reducing Term Assurance, your family is protected. If something happens to you, the insurance pays off the remaining home loan. Your family can keep the home without financial stress.

How Does It Work?

Let's break it down with a simple example:

  • You buy a home with a $500,000 mortgage for 25 years.
  • You also get an AIA MRTA policy for the same amount and term.
  • After 10 years:

• Your outstanding loan might be $350,000

• Your MRTA coverage would also be about $350,000

  • If something happens to you at this point, the policy pays out $350,000 to clear your remaining home loan.

What Does It Cover?

AIA Mortgage Reducing Term Assurance typically covers:

  1. Death
  1. Total and Permanent Disability
  1. Terminal Illness

Some policies also offer additional coverage for critical illnesses as an optional add-on.

Why Compare AIA Mortgage Reducing Term Assurance with other Term Life Options through Whatins?

Traditional Approach

  • Limited term length options from one insurer
  • May push longer terms than needed

Whatins Advantage

  • Compare term lengths across multiple insurers
  • See how different term life insurance periods affect premiums
  • Understand renewal options across insurers
  • See competing term length justifications and determine which one is best for you

How Much Does It Cost?

The cost of AIA MRTA depends on several factors:

  1. Your age
  1. The amount of your home loan
  1. The length of your loan term
  1. Your health condition
  1. Any additional riders you choose

Generally, because the coverage decreases over time, MRTA is often more affordable than other types of life insurance.

Pros and Cons

Pros

  • Affordable way to protect your home loan

  • Matches your decreasing loan balance

  • Gives peace of mind to you and your family

  • Can include additional coverage like critical illness

Cons

  • Coverage decreases over time

  • No cash value at the end of the term

  • May not provide extra funds beyond the loan amount

Frequently Asked Questions

Is mortgage insurance mandatory in Singapore?

It's not mandatory for private properties, but it's highly recommended. For HDB flats, you need at least the Home Protection Scheme (HPS).

Can I get MRTA if I have existing health conditions?

It depends on the condition. Always disclose your full health history when applying.

What happens if I sell my house before the policy ends?

You can usually cancel the policy, but check the terms as there might be charges.

Can I change my coverage amount if I refinance my loan?

Often, yes. Speak to your AIA consultant about adjusting your coverage.

Is MRTA the same as the CPF Home Protection Scheme (HPS)?

No, MRTA is a private insurance product, while HPS is a government scheme for HDB flats.

Wrapping It Up

AIA Mortgage Reducing Term Assurance offers a cost-effective way to protect your home and family from the financial burden of your mortgage if something unexpected happens to you. While it's not mandatory for private properties, it provides invaluable peace of mind.

Remember, every homeowner's situation is unique. The right coverage for you depends on your specific circumstances, including your loan amount, term, and overall financial situation.

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