The very first tabling of budget 2019 Malaysia by Pakatan Harapan happened on the 2nd November 2018 in Parliament. It was indeed a momentous one. Budget 2019 Malaysia, which was delivered by Finance Minister, Lim Guan Eng was centered to aspire “A Resurgent Malaysia, Dynamic Economy, A Prosperous Society”. There was a clear and positive impact on the life insurance or takaful sector as elucidated by Lim via its strategic focus ‘To ensure the socioeconomic well being of Malaysians’.
Indeed as we all know, insurance is an important piece of the every Malaysian life – however, what are the incentives for insurance that is explicitly mentioned in the Budget 2019 Malaysia? Also, in a nutshell, how would Budget 2019 Malaysia impact insurance for you and me, positively? Let us PolicyStreet assist to breakdown the complexities of Budget 2019 Malaysia and help you summarize the must knows when it comes to insurance!
A more comprehensive coverage of critical illnesses for B40’s
To further illustrate the government’s earnest gesture of goodwill on the matter and through its partnership with the private sector which is the insurance fraternity, it had been decided that the healthcare coverage under the B40 Health Protection Fund will be broadened to cover 36 major critical illnesses, as opposed to the initial proposal of just four illnesses which was announced during the Budget 2019 Malaysia presentation.
This scheme looks into the welfare of the Bottom 40 percent of the population by providing up to 14 days of hospitalization benefits. This free protection is capped at RM700 per annum or fixed at RM50 per day throughout the hospitalization period. Furthermore, RM100 million will be allocated by the government in introducing the Health Protection Scheme (PEKA) with a pilot screening project for B40’s aged 50 and above which will be commenced on 2019. The highlight of these schemes are to strengthening the health delivery system whereby the economic performance shall not be adjudicated wholly by the growth figures. Rather, other criterions such as shared prosperity and income disparity to secure a far-reaching growth in economy which will benefit all facets of society should be taken into consideration too.
These form of incentives made by the government acts as a federal for the B40 health protection scheme. Its focal point will be on the health protection of the B40 group which they do not have to use their own money as the allocation provided by the government will cover all the expenses. Assuming that, the health minister, Dr Dzulkefly Ahmad gave a positive remark that there will be a remarkable growth for all facets of society which is under the six pillars according to the Mid-Term Review of the 11th Malaysia Plan 2016-2020.
Enforcement of the Employment Insurance System (EIS)
January 1, 2019 will also see to the effectuation of the Employment Insurance System (EIS) which will be administered by the Social Security Organization (SOCSO). At its core, EIS is built on two main elements consisting of Employment Insurance and Active Labour Market Policy (ALMP). The existence of Employment Insurance is to provide temporary income so that those who are out-of-job, could still survive and meet their basic needs whilst searching for new employment.
With such system in place it would mean that compensation is given to those who have lost their jobs resulting from various reasons such as voluntary or mandatory separation scheme, redundancy through business restructuring or closure of companies, in the event of force majeure, constructive dismissal, or even because of sexual harassment, etc. EIS is also going the extra mile by helping workers with free career counseling and finding new jobs, in addition to providing job seeking allowances as well as skills training allowances. Hence, it is apparent that EIS’ role is crucial in providing income protection and the much needed safety net for employees, besides increasing the employability of those affected by such circumstances.
Separation of Tax Relief for Life Insurance/Takaful
Another significant impact of budget 2019 Malaysia would be the segregation of the combined RM 6,000 tax relief allocation for EPF contribution and life insurance or takaful premium. The new budget 2019 Malaysia has now allowed for a split in tax relief of RM 4,000 for EPF and RM 3,000 for life insurance/takaful. Prior to this new calculation, many of the EPF contributors who have already exceeded the RM 6,000 bracket were rather discouraged to purchase life insurance as they do not stand to benefit further from tax relief.
This form of incentive from the government is therefore a clear indication and a definitive answer to the quandary. The government sees the importance and the benefits of having life insurance/takaful policy as a mode of financial planning in Malaysian households and in providing a much needed security blanket to the masses.
No More Reasons for Procrastination
And there you have it, a round up on what’s in store for Budget 2019 Malaysia. We hope that this has been a comprehensive guide to the future of Malaysian insurance and how it will impact you and I, positively.
And now, with all this drive to be in full gear next year, there are no more reasons for anyone of us to procrastinate in shaping a better life for ourselves and our loved ones. Life may be full of uncertainties, but that does not mean that we should just let it be. Be bold. Be smart. Be proactive. Be the one to take-up an insurance/takaful policy because you only live once and you want to live it to the fullest, and if anything happens to you, well, your family is well taken care of by insurance protection. There is really never too late to start getting protected! Etiqa i-Double Secure Term Takaful Plan is one of the best life insurance product in the market today if you are looking for an affordable life insurance packed with many great benefits. Get RM 50 rebate if you purchase the Etiqa i-DoubleSecure Term Takaful Plan with us at PolicyStreet!