The government has confirmed that the basic medical and health insurance scheme, known as MHIT, will be launched as a standalone product in early 2027. The Finance Ministry explained in a written parliamentary reply that the new plan will not be tied to any investment component.

MHIT Will Be Introduced As A Simple, Independent Product

The upcoming MHIT scheme is designed to provide straightforward health protection without the investment-linked features that are common in many current medical plans. Bank Negara Malaysia is also reviewing how medical riders function within investment-linked policies to ensure that customers receive clearer information and more sustainable coverage.

Investment-Linked Medical Riders Come With Added Risks

Today, many Malaysians hold medical coverage through riders attached to investment-linked insurance. These riders rely on the performance of the policy’s investment account to keep premiums stable.

However, the premium level is not guaranteed. If investment returns are weak or if the cost of insurance increases, policyholders may need to pay more to keep the plan active. Withdrawals from the account value can also shorten how long the coverage lasts.

If a policyholder decides not to increase their premium, the policy may no longer be able to support the medical rider for the full term. The Finance Ministry noted that these features can make investment-linked policies more complicated for consumers to manage.

BNM Strengthens Oversight Of Investment-Linked Policies

To protect consumers, Bank Negara Malaysia has imposed stricter rules on how insurers market and manage investment-linked products. These rules are intended to improve transparency and ensure more responsible sales practices.

Insurers and takaful operators must provide clear annual updates on how long a policy is expected to remain sustainable, including details on investment performance and whether current premiums are sufficient to support future medical costs.

RESET Strategy Supports Healthcare Affordability

The development of MHIT is aligned with the government’s broader RESET strategy, which focuses on improving access to private health protection and addressing rising medical costs. The initiative brings together Bank Negara Malaysia, the Ministry of Health, and the Ministry of Finance to redesign the long-term structure of medical coverage in Malaysia.

A key element of RESET is the introduction of a basic insurance or takaful product with premiums that remain more stable over time. By offering a simpler, standardised plan, the government aims to provide Malaysians with affordable medical coverage that is easier to understand and less exposed to investment-related risks.

Government Committed To Long-Term Healthcare Reform

The Finance Ministry said the government remains focused on building a healthcare system that is inclusive and financially sustainable. The rollout of MHIT, together with ongoing regulatory improvements, is intended to ensure Malaysians have access to affordable protection while strengthening consumer confidence in medical insurance and takaful products.

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