LIAM Response on the tabling of 2025 Budget by the Prime Minister/Minister of Finance Malaysia, Yang Amat Berhormat Dato’ Seri Anwar bin Ibrahim

(Issued by the President of Life Insurance Association of Malaysia (LIAM), Mr Raymond Lew in conjunction with the tabling of the 2025 Budget by the Prime Minister/Minister of Finance Malaysia, Yang Amat Berhormat Dato’ Seri Anwar bin Ibrahim)

Kuala Lumpur, 18 October 2024 - The Life Insurance Association of Malaysia (LIAM) would like to congratulate the Government for tabling a caring budget, prioritising the needs and welfare of the Rakyat.

We fully support the Government’s efforts in promoting financial inclusion, raising awareness on the importance of financial protection, and enhancing healthcare coverage for the rakyat.

Hence it encourages more proactive planning for protection needs and expand insurance and medical coverage for both the public and the overall well-being for all Malaysians, as follows:

1.       Tax relief on medical insurance and education insurance:

i. We would like to extend our appreciation to the Government for increasing the Individual income tax relief for medical expenses up to RM10,000, which also covers medical and health insurance plans with co-payment features. By specifically encouraging medical and health insurance with co-payment plans for a family, it will help policyholders manage the cost of medical premiums in the long run and help fund for their future long term medical needs. 

(Note : Co-payment insurance plans allows insurers to offer lower premiums because policy owners are sharing the cost of medical expenses.)

ii. We are also very grateful to the Government for the increase in Individual income tax relief on education insurance and medical and health insurance premium from RM3,000 to RM4,000. This is a good financial planning incentive to encourage more Malaysians to purchase medical and health insurance plans as well as education policies for their children.

2.       Social Protection: Perlindungan Tenang Voucher Programme

The industry would also like to applaud the Government’s commitment to continuing the Perlindungan Tenang Voucher Programme in collaboration with Bank Negara Malaysia and the insurance and takaful industry.  This initiative will benefit up to two million Sumbangan Tunai Rahmah (STR) recipients, who are eligible to claim a RM30 voucher to finance part of the cost of purchasing a Perlindungan Tenang product that offers protection from death, personal accidents, and general risks such as fire and flood.

This incentive is extremely encouraging for the B40 community as Perlindungan Tenang products have been specially developed to incentivize the youth, young families and B40 household segment to purchase life insurance. It is indeed timely for the B40 household to receive the RM30 voucher of Perlindungan Tenang as a form of protection during these challenging times.

Perlindungan Tenang insurance plans are affordable, easily accessible and the claims is simple and straightforward. The support from the Government is extremely important to empower the B40 group to take the first step to introduce financial planning in their families.

3.       Stamp Duty:

We also welcome the announcement of the RM10 stamp duty rate (maximum of RM1,000) for assignment of life insurance policies based on love and affection.  This will encourage policyholders to assign their policies to their loved ones and giving them a lifetime security.

Conclusion

The life insurance industry plays a pivotal role in supporting the Rakyat’s well-being through financial protection, savings, and healthcare funding. With proper advanced planning and the right tax structure, the private sector and the Rakyat can be incentivised to play a bigger role and form a public-private sector partnership with the Government in sharing the cost of various social economic benefits for the nation.