PETALING JAYA: Expand the tax relief for medical and health insurance in the upcoming Budget 2025, says Life Insurance Association of Malaysia (LIAM).
LIAM chief executive officer Mark O’Dell said the government should increase the combined tax relief for education, medical, and health insurance from RM3,000 to RM6,000.
“This should include medical insurance premiums with co-payment plans in the existing RM8,000 tax relief for medical expenses covering self, spouse and children,” he said in a statement.
In Budget 2021, O’Dell said the government increased the tax relief limit on medical expenses for self, spouse and children for serious diseases from RM6,000 to RM8,000.
He said the tax relief should be extended to include medical insurance premiums with co-payment plans for self, spouse and children.
“For example, the cost of medical insurance for an average family of two adults and three children will be above RM3,000 per annum at the lower end.
“Hence, there is no savings for premium per annum for this family to support the education policy of the three children, which is not enough,” he added.
In its second proposal for the national budget, O’Dell also proposed the standardisation of the RM10 stamp duty for policy assignments on grounds of love and affection between family members.
In Budget 2024, he said the government introduced a proposal to charge a fixed stamp duty rate of RM10 for the deed of transfer of ownership of property involving beneficiaries, aligning with their eligibility according to wills, faraid, or the Distribution Act 1958.
“Prior to December 2021/January 2022, policyholders were only required to pay a flat RM10 stamp duty for policy assignment.
“However, starting in January 2022, certain stamp duty offices began applying ad valorem rates for assignments based on love and affection, resulting in higher costs for policyholders,” he said.
The group also proposed that the government abolish the 8% service tax on Group Employee Insurance Schemes to encourage employers to insure their staff under such schemes, thereby increasing the penetration rate of workers.
"By having more Malaysians covered under private group medical insurance, this will help to lessen the burden on the public healthcare system from both financial and capacity angles," O'Dell said.
Based on published statistics, he said, less than half of employees are covered by any form of group insurance.
