Kuala lumpur: The basic medical and health insurance (MHIT) slated for introduction in early 2027 will be offered as a standalone product, distinct from investment-linked policies, according to the Finance Ministry (MoF).
According to BERNAMA News Agency, a written reply on the Parliament portal clarified that the status of medical plans sold as riders within investment-linked policies is currently under review by Bank Negara Malaysia (BNM). In Malaysia, MHIT coverage can be incorporated as a rider in investment-linked policies, designed with a level premium rate throughout its policy term, which is funded upfront to cover future insurance costs.
The MoF explained that the premium rate for these policies is not guaranteed and may require increases if the investment-linked policy becomes unsustainable for the duration of the contract. Factors such as weak investment returns, the repricing of insurance costs for the MHIT rider, and withdrawals of account value by the policyholder could contribute to this unsustainability.
The ministry further detailed that if a policyholder declines to pay additional premiums or make a top-up, the coverage period of the investment-linked policy may be reduced. This complexity necessitates careful consideration of the associated risks by consumers. The MoF’s response addressed inquiries from Sim Tze Tzin (PH-Bayan Baru) concerning the future of investment-linked insurance under the new MHIT framework and the measures BNM is taking against insurance companies that fail to deliver promised returns on such policies, thereby shortening coverage periods.
In response, the ministry noted that BNM is enforcing stricter regulations to ensure professional and ethical sales practices and to enhance product transparency and disclosure of information. Insurance and takaful companies are now mandated to provide annual disclosures to policyholders regarding the sustainability of investment-linked policies, including investment performance and the adequacy of current premium levels to sustain coverage until the policy term concludes.
The MoF emphasized the government’s commitment to comprehensive healthcare reforms aimed at improving the national healthcare system, ensuring that health protection remains resilient, inclusive, and affordable for all citizens.