Basic Medical And Health Insurance Introduced In 2027 To Be A Standalone Product -- MoF

KUALA LUMPUR, Dec 4 (Bernama) -- The basic medical and health insurance (MHIT) to be introduced in early 2027 will be a standalone product and not linked to investments, according to the Finance Ministry (MoF).

In a written reply on the Parliament portal, the ministry said the status of medical plans sold as riders (additional benefits) in investment-linked policies is also being reviewed by Bank Negara Malaysia (BNM).

According to MoF, in Malaysia, MHIT coverage can be offered as a rider in investment-linked policies, which is designed with a level premium rate throughout its policy term via upfront funding to cover future insurance costs.

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The premium rate is not guaranteed and has to be increased if the investment-linked policy is no longer sustainable for the entire term of the contract, which may be due to factors including weak investment returns, repricing of insurance costs for the MHIT rider, and withdrawals of account value by the policyholder, MoF said.

“If the policyholder does not agree to pay additional premiums or top it up, the investment-linked policy coverage period may then be shortened.

“This makes investment-linked policies more complex, and consumers need to consider these risks carefully,” MoF said in response to Sim Tze Tzin (PH-Bayan Baru), who asked whether investment-linked insurance will continue under the base MHIT to be implemented by the government.

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Sim also wanted to know BNM’s measures against insurance companies that sell investment-linked policies promising high returns but fail to deliver the promised returns, resulting in coverage periods being drastically reduced.

The ministry said BNM has, therefore, set more stringent rules to administer investment-linked policy business to ensure professional and ethical sales conduct, and improved product transparency and information disclosure.

“For example, insurance and takaful companies are required to disclose the sustainability of investment-linked policies to policyholders annually, including their investment performance and the adequacy of current premium levels to maintain coverage until the end of the policy term,” the ministry added.

 MoF said the government is committed to implementing comprehensive reforms to improve the national healthcare system based on value, to ensure health protection remains resilient, inclusive, and affordable.

-- BERNAMA