Rising Premiums Push More Malaysians To Cancel Health Insurance

Samuel Chua

12th September 2025 - 3 min read

The number of Malaysians cancelling their health insurance and takaful policies has risen sharply following recent premium increases.

According to Sharipudin, a takaful agency manager, the trend began towards the end of last year and has continued into 2025.

“Many have ended their policies because they can no longer afford to pay the higher premiums. They tell us their salaries are not going up, but insurance prices keep rising. That is the main reason given,” he said when contacted by Sinar Harian.

He added that this development also affects companies and takaful agents, as their earnings depend directly on active clients.

Long-Time Policyholders Also Affected

Sharipudin noted that many who have cancelled are long-time contributors. While he described the situation as unfortunate, he said most customers felt they had little choice due to rising costs.

Another takaful consultant, Firdaus, said the same challenge is affecting his portfolio. Nearly half of his clients, including many who had only recently signed up, have cancelled their policies.

“Most of them acknowledge the importance of takaful plans, especially to cover expensive hospital treatment. But financial constraints, combined with premium hikes, have left them with no other option,” he said.

Not Just About Premiums

Alpha Agency manager, Mohammad Amirul Aizat Mohamad Adnan, believes that cancellations are not caused solely by premium increases. He said some policyholders are also struggling because of financial problems at their workplaces.

“There are indeed those who have terminated their policies. But at the same time, the number of businesses or policyholders using our services this year has increased compared with last year,” he explained.

Authorities Preparing New Measures

Bank Negara Malaysia (BNM) and the Ministry of Health (MOH) are aware of these challenges. Through the ongoing RESET strategy, both agencies are working to make private healthcare more affordable and sustainable.

One of the main initiatives is the upcoming base medical and health insurance/takaful (MHIT) product, designed especially for the M40 income group. This plan will use standardised premiums and aims to reduce sudden price hikes by spreading risks across a larger pool of policyholders.

Households may also be able to use their EPF Account 2 savings to pay for premiums on a voluntary basis. In addition, the Credit Counselling and Debt Management Agency (AKPK) launched a nationwide service in August 2025 to help policyholders manage their finances if premiums are repriced.

Rising Healthcare Costs Driving Reform

According to BNM, Malaysia’s medical cost inflation reached 15% in 2024, compared to a global and Asia Pacific average of 10%. Rising demand for healthcare services, medical technology costs, and the growing prevalence of non-communicable diseases are key drivers behind this trend.

RESET is part of a broader effort to address these pressures and ensure more Malaysians have access to meaningful health coverage in the years ahead.

More insights on Malaysians’ financial behaviour, including health insurance trends, will be revealed in the upcoming RinggitPlus Malaysian Financial Literacy Survey (RMFLS) 2025.