A taxpayer can enjoy a tax relied of up to RM6,000 for his combined contribution to EPF and life insurance, and a total of RM3,000 for medical and child education policy.

Life insurance

Examples of life insurance are whole life insurance and investment-linked insurance which give protection up to age 80, 90 or 100, endowment insurance which matures after certain year like 20 years, 25 years or at age 50, 55 or 60.

Tax relief for an individual’s life insurance is very clear cut. You pay the premium and you enjoy the tax relief.

But tax relief for life insurance bought by husband for wife, or wife for husband is quite confusing for many policy holders. If the husband is the payer, the insurance premium paid is qualified for tax relief under the husband’s name and vice verse.

The insurance premium paid by the husband or wife is commonly termed as payor benefit rider, payer benefit rider or spouse benefit rider.

In the situation where a husband doesn’t have any income, he can opt for combined assessment. In this case, whatever takaful or life insurance premium paid by the husband is considered paid by the wife. He is entitled for RM3, 000 of spouse relief.

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Whole Life insurance with medical benefits like critical illnesses

Based on the statement printed on the insurance premium certificate for tax relief issued to policy holders by a few major life insurance companies, if a policy holder would like to put this type of insurance under education or medical insurance category, only 20% or 60% of the total premium paid is eligible for tax relief.

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Child education policy

Under the guidelines provided by the Inland Revenue Board (Circular No. 4/98), various criteria must be met by an education insurance to enjoy tax deduction, which are:

1) The beneficiary of the insurance must be the child, while the life assured can either be the parent or the child.

2) In the case the parent is the life assured, the nominee must be the child.

3) If the life assured is the child, the following conditions must be fulfilled:

a. A payer benefit rider on the payer’s life with the same duration as the basic insurance must be attached. In the event the payer (parent) passed away and/or is totally and permanently disabled, all future premiums will be waived.

b. The premium of payer benefit rider, whether is in addition to the basic premium or is bundled with the basic insurance, which is a single premium, will qualify for tax deduction.

c. If the payer of the education insurance does not qualify for the payer benefit rider, which means no payer benefit rider can be attached to the basic insurance, the premium paid for the basic insurance is NOT entitled to claim for a deduction.

4) For a takaful education insurance, the matured amount must be made a ‘hibah’ or gift to the child by the participant (parent).

5) For both conventional and takaful education insurance, the matured amount must be scheduled to take place when the child is between 13 and 25 years of age.

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Hospitalization & Surgical (H&S) insurance

The insurance coverage should be for a period of 12 months or more.

The H&S insurance can be a rider or a stand-alone policy. If it is a rider, only the rider’s premium is eligible for deduction.

If critical illnesses rider is attached to a basic insurance, the total amount of the rider’s premium is deductible.

In situation where critical illnesses rider is attached to a term insurance or personal accident insurance, only 60% of the total premium is qualified for tax deduction.

Premium for waiver benefit rider and travel medical expenses insurance are NOT tax deductible.

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Personal Accident Insurance

Premium for personal accident insurance is not tax deductible.

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Haven't received the Annual Insurance Premium Certificate for income tax relief from your insurance company?

Want to write a letter to the insurance company?

See "Sample 4 at Sample Insurance Letter page

Looking for insurance contact information? Here there are:

Please refer to Directory of Insurance Companies in Malaysia for their telephone number, fax number, e-mail address,correspondence address, website address, location map (if any) and others.

1) Life Insurance Companies

Allianz Life Insurance Malaysia Berhad

AmAssurance Berhad

American International Assurance Company, Limited (AIA)

Asia Life (M) Berhad

(Now known as TM Asia Life)

AXA AFFIN Life Insurance Berhad

Commerce Life Assurance Bhd
(Formerly known as AMAL Assurance Bhd)

Great Eastern Life Assurance (Malaysia) Berhad

Hong Leong Assurance Berhad

ING Insurance Berhad

Malaysia National Insurance Berhad

Malaysian Assurance Alliance Berhad

Manulife Insurance (Malaysia) Berhad

(Formerly known as John Hancock Life Insurance (M) Bhd.)

Mayban Life Assurance Berhad

MCIS ZURICH Insurance Berhad

Prudential Assurance Malaysia Berhad

Tahan Insurance Malaysia Berhad

Uni.Asia Life Assurance Berhad

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2) General Insurance Companies

Please refer to Directory of Insurance Companies in Malaysia for their

telephone number, fax number, e-mail address,correspondence address, website address, location map (if any) and others.

ACE Synergy Insurance Bhd

Allianz General Insurance Malaysia Bhd

American Home Assurance Co.

Asia Insurance (Malaysia) Bhd

Aviva Insurance Bhd

AXA Affin Assurance Bhd

Berjaya General Insurance Bhd

Commerce Assurance Bhd

Jerneh Insurance Bhd

Kurnia Insurans (M) Bhd

Lonpac Insurance Bhd

Mayban General Assurance Bhd

Mitsui Sumitomo Insurance (M) Bhd

MUI Continental Insurance Bhd

Multi-Purpose Insurans Bhd

Oriental Capital Assurance Bhd

Overseas Assurance Corp. (M) Bhd

Pacific & Orient Insurance Co. Bhd

Pacific Insurance Bhd.

PanGlobal Insurance Bhd

Progressive Insurance Bhd

QBE Insurance (Malaysia) Bhd

RHB Insurance Bhd

Royal & Sun Alliance Insurance (M) Bhd

Tokio Marine Insurans (M) Bhd

Uni.Asia General Insurance Berhad

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3) Takaful Insurance Companies in Malaysia

Please refer to Takaful Insurance Operators in Malaysia for their telephone number, fax number, e-mail address,correspondence address, website address, location map (if any) and others.

Commerce Takaful Berhad

HSBC Amanah Takaful (Malaysia) Sdn Bhd

Mayban Takaful Berhad

Prudential BSN Takaful Berhad

Syarikat Takaful Malaysia Berhad

Takaful Nasional Sdn. Berhad

Takaful Ikhlas Sdn. Berhad

This site was last updated 24/05/07