KUALA LUMPUR: The government’s basic medical and health insurance scheme (MHIT), set to be introduced in early 2027, will be a standalone product not tied to investment performance, says the Finance Ministry.
The ministry said Bank Negara Malaysia (BNM) is also reviewing the status of medical plans sold as riders—additional benefits attached to investment-linked policies (ILPs).
Currently, MHIT coverage can be offered as a rider in ILPs, which are structured with a level premium rate over the policy term through upfront funding to cover future insurance costs.
However, the ministry noted that the premium is not guaranteed and may need to be increased if the policy becomes unsustainable due to weak investment returns, revised insurance costs for the MHIT rider, or withdrawals by the policyholder.
“If the policyholder does not agree to pay additional premiums or top up their account, the coverage period under the ILP may be shortened. This makes investment-linked policies more complex, and consumers need to consider these risks carefully,” the ministry said in response to Sim Tze Tzin (PH–Bayan Baru), who asked whether ILPs would continue under the new MHIT.
Sim also sought clarification on BNM’s actions against insurers that sell ILPs promising high returns but failing to deliver, sometimes resulting in drastically reduced coverage.
The ministry said Bank Negara has introduced stricter rules for ILPs to ensure professional and ethical sales practices, improve product transparency, and require annual disclosure to policyholders on the sustainability of ILPs, including investment performance and whether premiums are sufficient to maintain coverage until the end of the policy term.
The ministry added that the government is committed to comprehensive reforms to strengthen the national healthcare system, ensuring health protection remains resilient, inclusive, and affordable.
