LIAM Seeks Higher Combined Tax Relief In Budget 2026

KUALA LUMPUR, Oct 7 (Bernama) -- The Life Insurance Association of Malaysia (LIAM) is calling for higher combined tax relief for education, medical, and health insurance, raising the limit from RM4,000 to RM6,000 under the upcoming Budget 2026.

In a statement today, its chief executive, Mark O’Dell, said that taxpayers currently enjoy a maximum of RM4,000 tax relief on premiums paid for medical and education insurance combined.

The statement was issued in conjunction with the tabling of Budget 2026 by the Prime Minister and Minister of Finance, Datuk Seri Anwar Ibrahim, scheduled for Friday, Oct 10, 2025.

bootstrap slideshow

“This amount is insufficient in most cases. For example, medical insurance for an average family of two adults and three children costs more than RM3,000 per annum at the lower end.

“Hence, there are no savings for premiums per annum for this family to support the education policy for the three children, which is not enough,” he said.

Given the importance of health insurance for Malaysians, he noted that tax relief for such insurance plans should be increased to RM6,000, as the adjustment would help ease the financial burden of rising medical costs on families and encourage taxpayers to invest in long-term healthcare planning.

bootstrap slideshow

In addition, O’Dell proposed a waiver of the eight per cent service tax on group employee insurance schemes to encourage more employers to provide group insurance benefits, particularly for employees who are unable to purchase personal coverage.

“This initiative would also help reduce business operating costs, especially for small and medium-sized enterprises, and subsequently incentivise them to maintain employee insurance coverage.

“In addition, it would ease the pressure on the public healthcare system, as insured employees often seek treatment in private healthcare facilities,” he said.

O’Dell said the proposed tax exemption will greatly benefit workers, employers, and the national economy, while also contributing to an increase in insurance coverage rates among Malaysians.

Adopting these two proposals under Budget 2026 will significantly enhance financial inclusion, improve penetration rates, and contribute to a more sustainable and resilient economy for Malaysia.

He noted that the two proposals aim to strengthen financial inclusion and raise awareness of the importance of financial protection among Malaysians.

“Our recommendations focus on enhancing healthcare coverage and well-being, encouraging proactive financial planning, and expanding insurance protection for the general public as well as employees across the country,” he added.

-- BERNAMA