KUALA LUMPUR, Dec 4 — The basic medical and health insurance (MHIT) to be introduced in early 2027 will be a standalone product and not linked to investments, said the Finance Ministry (MOF).
It said the status of medical plans sold as riders (additional benefits) in investment-linked policies is also being reviewed by Bank Negara Malaysia (BNM).
In Malaysia, MHIT coverage can be offered as a rider in investment-linked policies, with a level premium rate throughout the policy term and funded upfront to cover future insurance costs.
The premium rate is not guaranteed and must be increased if the investment-linked policy is no longer sustainable for the entire term of the contract due to factors like weak investment returns, repricing of insurance costs for the MHIT rider, and policyholder withdrawals of account value.
“If the policyholder does not agree to pay additional premiums or top it up, the investment-linked policy coverage period may then be shortened.
“This makes investment-linked policies more complex, and consumers need to consider these risks carefully,” the MOF said in a written reply on the Parliament portal.
It was responding to Bayan Baru MP Sim Tze Tzin's query on whether investment-linked insurance will continue under the base MHIT to be implemented by the government.
Sim also wanted to know BNM’s measures against insurance companies that sell investment-linked policies promising high returns but fail to deliver them, resulting in coverage periods being drastically reduced.
The MOF added that BNM has therefore set more stringent rules to administer investment-linked policy business, ensuring professional and ethical sales conduct and improving product transparency and information disclosure.
“For example, insurance and takaful companies are required to disclose the sustainability of investment-linked policies to policyholders annually, including their investment performance and the adequacy of current premium levels to maintain coverage until the end of the policy term,” it said.
The government is committed to implementing comprehensive reforms to improve the national healthcare system on the basis of value, ensuring health protection remains resilient, inclusive, and affordable.
