oac or overseas assurance corporation, a wholly owned subsidiary of great eastern holdings and a member of the ocbc group has just launched a mortgage reducing term assurance plan, mortgage protector advantage which refunds all the premiums at the end of the policy term if no claim has been made. there is also a guaranteed surrender value of at least 40% of total premiums paid after policy has been in force for 7 years.
this is a first in the market as no other insurer offers a premium refund for similar class mrta products. 2 years ago, oac launched a refundable premium mortgage plan known as mortgage protector plus which differs from the current one in that it is priced to be a single premium plan.
my comments:
for mortgage protector advantage, the premium for a 40 year old male, non-smoker with sum assured of $1 million for a term of 20 years at an interest rate of 5% works out to have an annual premium of $5,846.67 which is payable for 15 years totalling $87,700.05.
in contrast, the mortgage protector (without premium refund) is priced with an annual premium of just $1,760.00, also payable for 15 years totalling $26,400.00.
whatever your views on this latest mrta plan by oac, one cannot deny that it adds yet another option available in the highly competitve mortgage insurance market.
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