LIAM Calls For Expansion Of Tax Relief For Medical, Health Insurance In Budget 2025

KUALA LUMPUR, Oct 8 (Bernama) -- The government should expand the tax relief for medical and health insurance in Budget 2025, said the Life Insurance Association of Malaysia (LIAM) chief executive officer Mark O’Dell.

He said the tax relief should include medical insurance premiums with co-payment plans within the existing RM8,000 tax relief for medical expenses covering self, spouse and children.

“Besides this, the government should increase the combined tax relief for education, medical and health insurance from RM3,000 to RM6,000,” he said in a statement today containing LIAM’s three proposals for Budget 2025.

Insurance co-payment refers to the policyholder paying a portion of the claimable hospitalisation expenses, typically expressed as a percentage.

Regarding its second proposal, LIAM has called on the government to standardise the RM10 stamp duty for policy assignments based on love and affection.

He explained that in Budget 2024, 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.

LIAM urges the government to extend this favourable RM10 stamp duty rate to the assignment of insurance policies based on love and affection, he said.

LIAM also proposed that the government abolish the 8.0 per cent 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.

“This is in line with the national agenda of increasing the insurance penetration rate and encouraging higher take-up rates by employers for the benefit of their employees, which, in turn, helps to reduce the burden on the public healthcare system,” he added.

-- BERNAMA