Tax Relief for Life Insurance

• Beneficiary is the child.
• The life assured is the parent and the child is the nominee.
• Maturity amount must be payable when your child is between the ages of 14 to 25 years.

• The life assured is the child.
• Parent is the proposer.
• Payer benefit is attached for the full term.
• Maturity amount must be payable when your child is between the ages of 14 to 25 years.

Nowadays, many of us pay for Medical Insurance for covering hospital expenses. You can claim against your income tax if ;

• Expenses are related to medical treatment resulting from a disease, accident or disability.
• The policy must be for coverage of 12 months or more.
• Both standalone policies and riders qualify, but if it is a rider, only the rider premium qualifies for deduction.

How to do it ?

Every year, your insurer will send you a statement for tax deductions purpose and you just need to fill in the figures shown in that statement. You may request from your insurance company or agent, if you didn’t get it.

You start paying insurance in October 2011. Every month you pay RM100 . Until December 2012, you have paid RM1,500. When you fill up Form BE for 2012, of course you claim for all expenses RM1,500. 

You can only claim RM1,200 for 2012 only, premium of RM300 for 2011 can only be claimed for income 2011.

Sometimes you pay RM2,400 for that year, but you don’t get full relief for that from income tax.

You need to check the riders in your insurance policy, some riders cannot be allowed for relief (Refer condition for Insurance Relief above)

Can you get relief if you buy Life Insurance for your parents ?

NO. Your parents can get deductions if they bought insurance for their own. However, you may claim for your parents’ medical expenses of up to Rm5,000.

Can you get relief if you buy Life Insurance for your children ?

NO. You can get deductions if you bought medical or education insurance for children up to RM3,000.

Can you get relief if you buy Life Insurance for your husband / wives ?

YES. Refer Section 49 (3) ITA 1967. husband can buy life insurance for wife, vice versa. For wife, if her husband marry another 3 more wives, the wife can buy insurance for another 3 wives of her husband.

If your company / employer buy a Group Life Insurance for you, can you claim for Relief ?

NO. Premium is by 3rd party for your life.