KUALA LUMPUR, Sept 10 – Only 55 per cent of Malaysians currently own life insurance, short of the 75 per cent target set for next year, Lim Guan Eng said today.
The finance minister was quoted by Malay Mail as saying that the 2020 target of a 75 per cent life insurance penetration rate set under the previous Barisan Nasional (BN) administration may not be achievable, and that Pakatan Harapan (PH) will revisit the numbers this year.
“That (75 per cent) was the original target set by the previous government. We will have to see what happens next year. After that, we will conduct assessments in terms of penetration, shortfalls and what needs to be done. It (the shortfall) is based on price and affordability,” Lim was quoted saying after launching Menara Prudential here today.
He also mentioned that the 55 per cent life insurance penetration rate had stagnated for years, with Bank Negara’s data proving that less than 41 per cent of Malaysians have at least one individual or group life insurance policy or family takaful.
Other than providing more diverse and affordable insurance products, the minister also called on insurance providers to develop and offer insurance protection plans for the under-served and under-protected who come from the bottom 40 per cent (B40) group of income earners.
Lim said PH had introduced mySalam, a health protection scheme for the B40, because of Malaysia’s low life insurance penetration rate.
“In the event someone (MySalam policy holder) is afflicted with one of the 36 critical illnesses, the person will receive a one-off payment of RM8,000 from the government and income substitution of RM50 per day for 14 days at government hospitals only. The income substitution is renewed annually,” Lim said.
Previously, the Finance Ministry told CodeBlue that as of July 30, mySalam approved 135 claims for critical illness and 1,078 hospitalisation claims, totalling RM1,372,750 in payouts.
The payout sum is a tiny fraction of the insurance premiums that the government is paying Great Eastern Takaful Berhad, amounting to about RM400 million a year. The Singapore-based insurance company is contributing RM2 billion to the mySalam fund for five years.