Its president Loh Guat Lan said that one way would be by allowing the current tax relief of RM8,000 for medical expenses on self, spouse and children for serious diseases be extended to include medical insurance premiums.
Alternatively, she added, the budget could increase the current combined tax relief of RM3,000 (for medical and health insurance premiums and premiums for education insurance) to RM6,000.
“This will lift the burden of potentially large medical expenses from the taxpayer due to the pooling of risk.
“The cost of medical expenses typically increases with age and taxpayers are utilising their current income to fund for their future long-term medical needs,” she said in a statement today.
Loh said the cost of medical insurance for an average family of two adults and three children is about RM2,500 per annum at the lower end.
“Hence, there is only RM500 savings for premium per annum for this family to support the education policy of the three children, which is not enough.
“Given the importance of having health insurance for Malaysians, the tax relief for this type of insurance plan should be increased,” she said.
In addition, LIAM has suggested that the government increases the current limit of personal tax relief for life insurance premiums from RM3,000 to RM5,000; waiver of 6% service tax on Group Employee Insurance Scheme; and extension of the RM50 Perlindungan Tenang Voucher (PTV) Programme for B40 for another year.
“The abolishing of the 6% service tax will encourage employers to insure their staff under group schemes.
“Based on published statistics, less than half of the employees are covered by any form of group insurance. This leaves a significant gap that needs to be closed so as to extend the insurance safety net to as many Malaysians as possible,” she said.
On the extension of the RM50 PTV programme, she said recipients need time to learn and accept insurance/takaful protection as part of family’s financial planning.
She said the availability of Perlindungan Tenang products is important in providing immediate temporary relief in the event of a misfortune and give the insured peace of mind knowing that financial relief is available in an easy and timely manner.
“Extending this incentive for another year will benefit the majority of the B40 households in the country.”