30th January 2026 - 3 min read
Discussions are underway with the Employees Provident Fund to assess whether withdrawals from retirement savings can be used to purchase the new Base Medical and Health Insurance or Takaful product, according to Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said the government is exploring whether the Base plan can be included under existing mechanisms that allow limited use of EPF savings for insurance coverage.
Amir Hamzah said EPF’s Akaun Sejahtera, also known as Account 2, is currently permitted for use under the i Lindung scheme. Through i Lindung, contributors may use part of their savings to purchase insurance products that cover critical illnesses.
The government is now discussing with EPF whether the Base Medical and Health Insurance or Takaful plan could be recognised as part of the i Lindung offering, which would allow contributors to make withdrawals for this purpose.
He said these discussions are still ongoing and no decision has been finalised.
According to Amir Hamzah, the government expects that the approach under consideration could help build a stronger system that complements Malaysia’s public healthcare services.
He said broader support and coordination would be needed to ensure that any changes balance healthcare access with the long term role of retirement savings.
The Base Medical and Health Insurance or Takaful framework was released by Bank Negara Malaysia on 22 January. The framework introduces a standardised and voluntary insurance product aimed at Malaysians who are currently uninsured or facing sharp increases in medical insurance premiums.
The Base plan is designed to provide baseline coverage that is consistent across insurers and takaful operators. It also seeks to improve portability and price transparency, making it easier for consumers to compare products and maintain coverage over time.
The product was developed under the Reset framework, which focuses on improving the sustainability and accessibility of medical insurance.
Allowing EPF withdrawals for the Base Medical and Health Insurance or Takaful plan could make basic medical coverage more accessible for individuals who struggle with rising premiums or lack insurance altogether. For working adults, this may reduce reliance on out of pocket medical spending and lower the risk of large healthcare expenses.
However, any use of retirement savings for insurance would reduce the amount available for long term retirement needs. The impact would depend on withdrawal limits, eligibility rules, and how the product is priced. As discussions are still ongoing, contributors would need to weigh the trade off between immediate healthcare protection and future retirement adequacy if the option is introduced.
At this stage, the proposal remains under review, and no changes to EPF withdrawal rules have been confirmed.
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Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.
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