Anonymous
Could someone highlight the not so obvious pros and cons when comparing between MRTA vs HPS for HDB flat pls? Not sure which one to go for
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Hariz Arthur Maloy
25 Jun 2019
Independent Financial Advisor at Promiseland Independent
Brian answered Level Term vs MRTA/HPS.
But if you're only considering a private MRTA vs HPS, then I suggest looking at the private policy because you pay HPS with your OA which could've been generating 2.5-3.5% interest annually.
I'd opt out of HPS when I can after purchasing additional cover either via a Level Term or a MRTA.
HPS isn't actually even the cheapest policy available. It's a little pricey compared to private policies when you're younger.
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You mean Term (Level Term) vs HPS (Reducing Term)?
MRTA and HPS basically the same where it takes care of your house loan upon the insured death. MRTA is used by the bank and HPS is used by HDB loan that uses CPF monies.
If Term vs HPS, then you can go to comparefirst website and generate the loan amount and see the premium vs what you are currently paying for your MRTA/HPS.
You might be surprise the Term might cost about the same or slightly more than your MRTA/HPS.
Maybe just to add some e.g. on how Term vs MRTA/HPS payout. Assume insured took $400k loan for 30years and bought the same protection.
Death happen on year 20.
A) MRTA/HPS will pay off the remaining 10 years (of about 168k)
B) Term will pay the full 400k.
So you can use the 400k to pay the remaining 168k loan and have additional $232k for other purpose.
Bonus: You can "re-use" your term policy should you plan to sell current house and buy a new one.