Namlifa proposes the separation of EPF contribution and insurance premium for tax relief
SIBU: The National Association of Malaysian Life Insurance and Family Takaful Advisors (Namlifa) will submit its application of two items to the government for consideration under the 2018 Budget.
According to Namlifa president James Bong, the said items are tax relief on Employees Provident Fund (EPF) contribution, and that for insurance premium.
It is said that the current treatment is that these two are tied together for a combined tax relief of RM6,000.
“What we are asking from the government is to consider separating life insurance from EPF contribution, resulting in a tax relief of RM6,000 each. This is justified,” he told reporters after attending the 14th Akard Award 2017 recognition for Namlifa Sibu, themed ‘Champion of Champions’, at a hotel here on Friday night.
The event was meant to celebrate the achievement of 47 award recipients.
Adding on, Bong viewed that with the two items combined for the RM6,000 tax relief, there would be no point for anyone to obtain an insurance policy.
“For example – if your total EPF contribution is RM5,000, then your insurance premium eligible for tax relief would only amount RM1,000. If your EPF contribution for one year is RM7,000, you would have no incentive to buy life insurance policy.
“What we’re asking is the Bank Negara’s vision to achieve 75 per cent penetration rate by 2020 and also the desire for insurance agencies to have more clients.
“We are asking for the detachment of the two items (EPF and insurance premium) so as to encourage the people to buy more insurance policies,” he pointed out.
On Goods and Services Tax (GST) being imposed on medical insurance, Bong said medical insurance is a necessity – everybody should have it because in times of need, the medical insurance holders could check in to most private hospitals to get treatment faster, rather than having to queue at government hospitals.
He said some companies dealing with medical insurance are not making any profit, but they take it as their responsibility for the policyholders.
“We feel it is unfair to impose GST on medical insurance because this is a necessity product. Nobody should benefit from it.
“Looking at some regional countries like Singapore, GST is not imposed on it (medical insurance) because it is a necessary product and in the long run, if the people could take charge when it comes their own medical treatment, it would be better for the government in that there would be less people queuing at government hospitals and using the facilities there.”
On Akard – regarded as the premier recognition for life insurance professionals and financial advisors – Bong said it is the ultimate platform for those in the life insurance industry to turn their dreams into reality.
According to him, the Akard membership has grown by leaps and bounds since its inception in 2004.
Meanwhile, Bong said Namlifa through its education arm, the Financial and Life Practitioners Council (FLPC) is tasked with ‘professionalising’ all insurance agents via the FCLP programme, which received international accredited from the Finance Accreditation Agency (FAA) recently.
Bong said since its introduction some 20 years ago, the FCLP life insurance specialisation course has churned out resilient and quality agents for the industry – those who are able to weather stormy environment arising from globalisation and liberalisation.
“I invite all agents to enrol into the FCLP course, which has earned its reputation in boosting sales – leading agents to achieve the prestigious Akard status,” he added.