Life insurers say that the separation of tax breaks will give life insurance the appropriate center of interest

KUALA LUMPUR (Nov. 2): The separation of tax relief between the contribution of the employee provident fund (EPF) and the deduction of life insurance or takaful of RM4,000 and RM3,000 respectively , instead of a combined tax relief of RM 6,000 previously, will give life insurance is the focus of concern and encourages individuals to take out life insurance as a key form of protection for all Malaysians, announced today Malaysia Life Insurance (LIAM).

"The savings achieved through the EPF will meet the retirement needs of individuals, while life insurance will provide financial protection for the family if the breadwinner faces an unfortunate event," said his President Anusha Thavarajah in a statement.

For civil servants benefiting from the pension scheme, the tax deduction will reach RM 7,000.

She commented on the measures provided for in the 2019 budget, which was tabled today by the Minister of Finance, Lim Guan Eng.

Citing statistics in the BNM 2016 Financial Stability and Payment Systems Report, Anusha said the insurance and takaful penetration rate has been around 55 percent for five years.

"By eliminating the multiple ownership of life insurance or takaful policies, this figure is reduced to 35% of the insured population, of which only 4% of households in the lower income group benefit from some form of life insurance or takaful coverage.

"Therefore, the separation of tax relief between the EPF and the life insurance would certainly benefit people by encouraging them to take out life insurance for themselves and their loved ones and helping to increase the number of insured in Malaysia to 75%, "she said.

Anusha added that LIAM was also encouraged by the removal of stamp duty for the purchase of Perlindungan Tenang products.

"This is extremely encouraging, as Perlindungan Tenang products have been specially developed to encourage young people, young families and the poorest 40% of the household segment (B40) to take out life insurance.

"We also welcome the public-private partnership announced by the government through the creation of a critical illness fund called Dana Perlindungan Kesihatan Nasional B40," she added.