LIAM Response on the tabling of Budget 2019 by the Finance Minister Yang Berhormat Lim Guan Eng

(Issued by the President of Life lnsurance Association of Malaysia (LIAM), Ms Anusha Thavarajah in conjunction with the tabling of Budget 2019 by the Finance Minister Yang Berhormat Lim Guan Eng on Friday, 2 November 2018)

LIAM Response on the tabling of Budget 2019

by the Finance Minister Yang Berhormat Lim Guan Eng

Malaysia Wibawa, Ekonomi Dinamik, Rakyat Sejahtera

Kuala Lumpur, 2 November 2018: The Life Insurance Association of Malaysia (LIAM) would like to thank the Government for tabling a very caring budget to take care of the well-being of the Rakyat.

Anusha Thavarajah, President of the Life Insurance Association of Malaysia, said “The life insurance industry is pleased with the special incentives that the Government has granted to fulfill the needs of the rakyat and to promote a fully inclusive society.” 

Separation of Tax Relief for EPF and Life Insurance or Takaful Premiums

We welcome the tax relief on the separation of EPF and the life insurance/takaful which is now separated into RM4, 000 for EPF and RM3, 000 for life insurance/takaful (previously tax relief of RM6,000 for EPF and life insurance/takaful combined).

This tax relief separation we believe will give life insurance the right focus and  encourage individuals to purchase life insurance as a form of protection that is critical for all Malaysians. The savings in the EPF will meet individuals’ retirement needs while life insurance will ensure that the family is financially protected if the breadwinner meets with an unfortunate event.

Based on statistics issued by Bank Negara Malaysia (BNM) in the 2016 BNM Financial Stability and Payment Systems Report, the penetration rate of insurance and takaful is hovering at about 55% for the past 5 years.

Eliminating multiple ownership of life insurance/takaful policies, this figure reduces to 35% of population insured. Out of this, only 4% of households in the lower income group has some form of life insurance/takaful cover.

Therefore, the separation of the EPF and life insurance tax relief would certainly benefit the rakyat by encouraging them to buy life insurance for themselves and their loved ones and help to increase Malaysia’s insured population to 75%.

Perlindungan Tenang - Waiver of stamp duty

We would also like to thank the Government for waiving the stamp duty for the purchase of Perlindungan Tenang products. This is extremely encouraging as Perlindungan Tenang products have been specially developed to incentivize the youth, young families and B40 household segment to purchase life insurance.  The premiums for Perlindungan Tenang products has been specially priced at premiums from as low as RM3.00 per month.

Riding on three basic criteria of being affordable, easy and simple claims process, the availability of PT products is important in providing immediate temporary relief in the event of misfortune, able to access financial resources and having peace of mind knowing that financial relief is available in an easy and timely manner.

The Perlindungan Tenang has been designed to introduce  insurance protection for all Malaysians, which is easily accessible and fits their needs.  Ultimately, it would help to fulfil the nation’s aspiration of reducing the protection gap and achieving financial inclusion for all.

A table featuring all 6 life insurance products under Perlindungan Tenang protection plans is attached.

‘Dana Perlindungan Kesihatan Nasional B40’ for Critical Illness

We welcome the public private partnership announced by the Government via the setting up of a Critical Illness Fund called Dana Perlindungan Kesihatan Nasional B40.