Govt to pilot B40 health insurance plan

PETALING JAYA: The government will pilot a national health insurance scheme for the bottom 40% of the population (B40).

Under the B40 Health Protection Fund scheme, the government together with private insurers will provide free protection against the top four critical illness and up to 14 days of hospitalisation benefits starting in January.

The free protection against the top four critical illness will go up to a sum of RM8,000, while the hospitalisation income cover will be at RM50 per day or RM700 per annum.

Great Eastern Life Insurance has agreed to contribute the initial seed funding of RM2bil to this fund, which will be managed by Bank Negara Malaysia, said Finance Minister Lim Guan Eng in his Budget 2019 speech.

According to Great Eastern’s spokesman, the insurer will be making an announcement before market opens on Monday.

Meanwhile, the Life Insurance Association of Malaysia (Liam) welcomes the tax relief on the separation of the Employees Provident Fund (EPF) and life insurance or takaful.

This is now separated into RM4,000 for EPF and RM3,000 for life insurance or takaful, from the previous tax relief of RM6,000 for the combined EPF and life insurance or takaful.

“We believe this tax relief separation will give life insurance the right focus and encourage indi­viduals to purchase this critical form of protection.

“The savings in EPF will meet the individual’s retirement needs, while life insurance will ensure that the family is financially protected if the breadwinner meets with an unfortunate event,” said Liam president Anusha Thavarajah.

This incentive will also help to increase Malaysia’s insured population to 75% from the 55% penetration rate of insurance and takaful over the past five years based on the 2016 Bank Negara Malaysia Financial Stability and Payment Systems Report.

Eliminating multiple ownership of life insurance or takaful policies, only 35% of Malaysia’s population were found to be insured over the past five years.