KUALA LUMPUR: The Life Insurance Association of Malaysia is calling for higher combined tax relief for education, medical, and health insurance in Budget 2026.
LIAM proposes raising the current tax relief limit from RM4,000 to RM6,000 for these insurance premiums.
Its chief executive Mark O’Dell stated that the existing RM4,000 maximum is insufficient for most taxpayers.
He explained that medical insurance for an average family of two adults and three children already costs over RM3,000 annually at the lower end.
This leaves minimal savings for education policy premiums for the children within the current tax relief limit.
O’Dell emphasised that increasing the relief to RM6,000 would ease the financial burden of rising medical costs on families.
The adjustment would also encourage more taxpayers to invest in long-term healthcare planning.
Additionally, LIAM proposed an eight per cent service tax waiver on group employee insurance schemes.
This initiative aims to encourage more employers to provide group insurance benefits for their staff.
O’Dell noted this would particularly help employees who cannot afford personal insurance coverage.
The tax waiver would also reduce business operating costs, especially for small and medium-sized enterprises.
It would subsequently incentivise these businesses to maintain employee insurance coverage.
Furthermore, this measure would ease pressure on the public healthcare system.
Insured employees often seek treatment in private healthcare facilities instead of public ones.
O’Dell stated these proposals would greatly benefit workers, employers, and the national economy.
Adopting these measures would also contribute to higher insurance coverage rates among Malaysians.
The proposals aim to strengthen financial inclusion and raise awareness about financial protection.
LIAM’s recommendations focus on enhancing healthcare coverage and encouraging proactive financial planning.
They also aim to expand insurance protection for the general public and employees nationwide.
Implementing these proposals would significantly improve insurance penetration rates across Malaysia.
This would ultimately contribute to a more sustainable and resilient national economy. – Bernama