LIAM Response to the tabling of 2026 Budget by the Prime Minister/Minister of Finance Malaysia, Yang Amat Berhormat Datuk Seri Anwar Ibrahim
(Issued by the Chief Executive Officer of Life Insurance Association of Malaysia (LIAM), Mark O’Dell in conjunction with the tabling of the 2026 Budget by the Prime Minister/Minister of Finance Malaysia, Yang Amat Berhormat Datuk Seri Anwar Ibrahim)
Kuala Lumpur, 10 October 2025 - The Life Insurance Association of Malaysia (LIAM) congratulates the Government for tabling a caring and inclusive Budget that prioritises the needs and welfare of the Rakyat.
We fully support the Government’s continued efforts to promote financial inclusion and raise awareness on the importance of life insurance protection among Malaysians, particularly the younger generation.
These initiatives will encourage proactive financial planning, strengthen social protection, and expand insurance coverage for the overall well-being of all Malaysians.
- Extension of the existing tax relief of up to RM3,000 for individual to include life insurance premiums for children’s protection
LIAM welcomes and appreciates the Government’s initiative to extend the existing individual income tax relief of up to RM3,000 for life insurance premiums to include life insurance protection for children.
This incentive will encourage parents and young families to plan early for their children’s financial security. Purchasing life insurance for children at a young age is generally more affordable and ensures continued coverage into adulthood, regardless of future health conditions. This incentive will also increase the penetration rate of life insurance which is currently stands at 45% - meaning that only four out of ten Malaysians have life insurance protection.
Currently, taxpayers also enjoy another combined tax relief of up to RM4,000 for medical and education policies for children — an important complement to the life insurance tax relief extension that further supports holistic family financial planning.
- Social Protection: Exemption of Stamp Duty for Perlindungan Tenang and low premium insurance products until 2028
The industry also applauds the Government’s decision to extend the Stamp Duty exemption for Perlindungan Tenang and other low-premium insurance products until 2028.
This measure will continue to make insurance protection more accessible and affordable, particularly for the B40 community. The Perlindungan Tenang initiative, introduced in 2017, was designed to encourage Malaysians — especially youth, young families, and lower-income households — to obtain basic insurance and takaful protection.
Perlindungan Tenang products provide simple, affordable, and easily accessible protection against life’s common risks such as death, personal accidents, fire, and flood. The continued support from the Government plays a vital role in empowering the B40 group to take the first step towards financial security and long-term financial resilience.
Conclusion
The life insurance industry remains committed to supporting the Government’s aspirations to strengthen the nation’s social protection framework. The industry plays a pivotal role in enhancing the Rakyat’s financial well-being through protection, long-term savings, and healthcare funding.
With proactive planning and the right tax incentives, both the private sector and the Rakyat can be further encouraged to take part in building a sustainable social protection ecosystem — in partnership with the Government — for the benefit of all Malaysians.
