On tax returns, life insurance and medical insurance should be listed separately.
When listing insurances for personal income tax, be careful! Remember to list your life insurance and medical insurance separately.
According to the tax relief lists from Inland Revenue Board (LHDN) life insurance and medical insurance, fall under different tax relief programmes. Life insurance can be deducted up to RM3000, while medical and education insurance are under the same programme can be deducted up to RM3000.
You must declare life and medical insurance separately on your tax return if your insurance is an investment-linked policy. In an investment-linked policy, the insured pays a single premium and receives multiple benefits at the same time, such as life insurance, 36 diseases, permanent disability, medical cards, and so on. The premium for the investment-linked policy will be split into two parts: the insurance premium and the trust fund premium.
Example:
Jane’s insurance is investment-linked insurance, with a yearly premium of RM3000. When filing tax returns, Jane is unable to deduct RM3,000 from the life insurance tax relief programme, and she is also unable to deduct RM3,000 from her medical insurance. Because Jane’s insurance package contains both life and medical coverage.
Jane should look over her Premium Paid Statement, which will show the amount of life and medical insurance she has paid. Only Jane will be able to determine how much tax relief she is eligible for under each scheme.
RM422.15 is for life insurance, RM2254.38 is for medical insurance, RM187.87 is for insurance that can be used for medicine or life, and RM135.60 is for others in this policy.
It’s worth mentioning that the third portion of the RM187.87 can be used for medical insurance tax relief up to 60% and life insurance tax relief up to 100%.
