Tax relief for Insurance

A taxpayer can enjoy a tax relied of up to RM6,000 for his combined contribution to EPF and life insurance, and a total of RM3,000 for medical and child education policy.

Life insurance

Examples of life insurance are whole life insurance and investment-linked insurance which give protection up to age 80, 90 or 100, endowment insurance which matures after certain year like 20 years, 25 years or at age 50, 55 or 60.

Tax relief for an individual’s life insurance is very clear cut. You pay the premium and you enjoy the tax relief.

But tax relief for life insurance bought by husband for wife, or wife for husband is quite confusing for many policy holders. If the husband is the payer, the insurance premium paid is qualified for tax relief under the husband’s name and vice verse.

The insurance premium paid by the husband or wife is commonly termed as payer benefit rider, payer benefit rider or spouse benefit rider.

In the situation where a husband doesn’t have any income, he can opt for combined assessment. In this case, whatever takaful or life insurance premium paid by the husband is considered paid by the wife. He is entitled for RM3, 000 of spouse relief.

Life Insurance

Buying life insurance for you and your loved ones helps provide some financial security in times of hardship. The money from your policy will be paid to your loved ones when you pass away or to you should you suffer a total and permanent disability or loss.

WHY SHOULD I BUY LIFE INSURANCE?

-To ensure that your immediate family has some financial support after your demise
-To finance your children’s education
-To have a savings plan for the future so that you have a constant source of income after retirement
-To ensure that you have extra income when your earnings are reduced due to serious illness or accident