The Life Insurance Association of Malaysia (LIAM) calls for emphasis on and increasing awareness on the importance of financial protection among Malaysians.
In respect of the upcoming Budget 2023, LIAM has set out a proposal to help enhance the well-being of the Rakyat by encouraging to plan for their protection needs and coverage among Malaysian Employees by:
– Increasing personal tax relief for life insurance premiums from RM3,000 to RM5,000;
The COVID-19 pandemic has made everyone realize on how uncertain life can be and the need to protect oneself and our loved ones financially as a safety net in the event of any unforeseen circumstances or the passing of a breadwinner in a family.
Having a life insurance policy is an important part of financial planning because it protects you and your loved ones from the costs associated with accidents, disability, illness and death. A life insurance policy can help provide a family with a lump sum of money to pay off mortgage debt, loans and bills, hence eliminating financial stress.
– Including medical insurance premium in the tax relief of RM8,000 which is specifically for medical expenses for self, spouse and children, or, increase the tax relief for education, medical and health insurance (MHI) as well as MHI plans with co-share benefits from RM3,000 to RM6,000;
– Extension of RM75 Perlindungan Tenang Voucher Programme for B40 for another year i.e. from 2022 – 2024;
In Budget 2021, the Government introduced the Perlindungan Tenang Voucher Programme to provide better social protection for the B40 group. Under this programme, all B40 Bantuan Prihatin Rakyat recipients were given a RM50 voucher as financial aid to purchase Perlindungan Tenang products. This initiative augurs well for the promotion of financial inclusion among the B40 group and will also encourage more Malaysians to take up life insurance/takaful protection.
As of 24 September 2022, about 4 million vouchers worth over RM289 million under the RM75 PTV have been redeemed by BKM recipients. The PTV RM75 will end in December 2022 and we hope the Government will extend it to 2024.
– Waive the 6% service tax on Group Employee Scheme;
Based on published statistics, less than half of the employees are being covered by any form of group insurance. This leaves a significant insurance gap that needs to be closed, to extend the insurance safety net to as many Malaysians as possible. This is especially true for the B40 group.
– maintaining a nominal Stamp Duty Rate for Assignments on life insurance policies at the nominal rate of RM10.
Lembaga Hasil Dalam Negeri (LHDN) has implemented a new rate for stamp duty of assignments of life insurance policies (mainly where it is for love and affection), where LHDN now assesses the stamp duty on an ad valorem rate, using the value of the sum assured. Such assignments had all along been imposed a nominal stamp duty of RM10.00 per assignment. This change in policy started sometime in December 2021 where certain LHDN branches (Stamp Office) rejected the nominal stamping of such assignments of policies.
