Hi EC,
Your understanding is correct. Mortgage Protector (MP) is a no-frills reducing assurance term plan whereby the payout drops over time. MP Advantage (MPA) will have a surrender value from year 8 onwards, and should no claim occur, the premiums are fully refunded to you at the end of the policy term. But I believe the premiums are substantially higher.
In general, protecting a mortgage can be done via a level term plan or a reducing term plan such as MP or MPA. You can compare MP against other reducing term plans frmo other insurers to see which offers a more cost effective option for you. Such plans are no-frills so it's more often than not a race to the bottom when it comes to cost.
However, you also need to look at factors such as the big picture, for example, other than the mortgage, do you have other liabilities or dependents? If so, you have to get more coverage over and above just the mortgage amount. Additional, you can consider a level term plan, as the premiums might not be very much more than a reducing term plan, and in some cases, even cheaper than a reducing term plan.
I'd like to point out that there is usually some form of cost efficiency achieved when you get a higher sum assured, such as $1 million, so while a level term $1 million coverage is 25% more coverage than a $800K reducing term , it could be maybe only 10% more expensive, or, with the current slate of promotions on going, even cheaper than a $800K reducing term. You'd want to see the options available before you commit.
For a reducing term assurance with a refund feature, there aren't many such policies on the market any more. I do recall the premiums are rather high for such policies, so you might really be better off using a normal term plan to manage this risk, as the cost savings can be substantial.
I note you have provided some details about your loan, but to benchmark the cost of such term plans, we will actually need your age/gender as well. You might want to speak with an independent financial advisor for more details and viewpoints.
Hi EC,
Your understanding is correct. Mortgage Protector (MP) is a no-frills reducing assurance term plan whereby the payout drops over time. MP Advantage (MPA) will have a surrender value from year 8 onwards, and should no claim occur, the premiums are fully refunded to you at the end of the policy term. But I believe the premiums are substantially higher.
In general, protecting a mortgage can be done via a level term plan or a reducing term plan such as MP or MPA. You can compare MP against other reducing term plans frmo other insurers to see which offers a more cost effective option for you. Such plans are no-frills so it's more often than not a race to the bottom when it comes to cost.
However, you also need to look at factors such as the big picture, for example, other than the mortgage, do you have other liabilities or dependents? If so, you have to get more coverage over and above just the mortgage amount. Additional, you can consider a level term plan, as the premiums might not be very much more than a reducing term plan, and in some cases, even cheaper than a reducing term plan.
I'd like to point out that there is usually some form of cost efficiency achieved when you get a higher sum assured, such as $1 million, so while a level term $1 million coverage is 25% more coverage than a $800K reducing term , it could be maybe only 10% more expensive, or, with the current slate of promotions on going, even cheaper than a $800K reducing term. You'd want to see the options available before you commit.
For a reducing term assurance with a refund feature, there aren't many such policies on the market any more. I do recall the premiums are rather high for such policies, so you might really be better off using a normal term plan to manage this risk, as the cost savings can be substantial.
I note you have provided some details about your loan, but to benchmark the cost of such term plans, we will actually need your age/gender as well. You might want to speak with an independent financial advisor for more details and viewpoints.