Insurance premiums are among the most misunderstood personal tax reliefs in Malaysia. Separate limits for life insurance, EPF, medical coverage, and education policies often lead to confusion, underclaiming, or incorrect filings.

For YA 2025, the education and medical insurance relief cap has been increased to RM4,000. If you’ve been claiming less than that because you assumed the old RM3,000 limit still applied, it’s worth revisiting your figures before you file.

Insurance Reliefs Available For YA 2025

Three tax relief categories include insurance premiums, and which one applies depends on the type of coverage you have.

The life insurance and EPF relief has a combined cap of RM7,000, but it’s split into two separate buckets. Up to RM3,000 goes toward life insurance premiums or voluntary EPF contributions, and up to RM4,000 covers mandatory EPF contributions and other approved schemes.

Pensionable civil servants who don’t contribute to EPF can only claim the maximum limit of RM3,000 for life insurance premiums alone. Those who do make voluntary EPF contributions are subject to the same RM3,000/RM4,000 split.

Which Coverage Types Qualify

Not all coverage types fall neatly into one box. The table below shows how each type of insurance maps to the right relief category.

Accidental and waiver riders are not eligible for tax relief regardless of which policy they’re attached to. Critical illness coverage is where it gets interesting: you can claim 100% under life insurance if it’s bundled into a life policy, or 60% under education and medical insurance if it’s a standalone plan or rider on a personal accident policy. If your life insurance relief is already close to the RM3,000 cap, running the numbers both ways is worth the few minutes it takes.

Takaful contributions that fall under the same categories are treated the same as conventional insurance premiums.

Reading Your Annual Insurance Statement

Your insurer will usually send you an annual premium statement in early January or February. Most insurers already break down how much of your premium qualifies for each relief category, so you don’t have to work it out yourself.

A typical statement looks something like this:

If your statement doesn’t break premiums down this way, contact your insurer and ask specifically for a tax relief statement.

How It Works In Practice

Say you have three policies with the same insurer, and your statements show the following figures.

Your life insurance total comes to RM3,868.56, but the cap is RM3,000, so you can only claim RM3,000 there.

For the critical illness portion on Policy C, you have two options. Claim it under life insurance at 100% (RM234.90), or under education and medical insurance at 60% (RM140.94). Since your life insurance is already maxed out, the smarter move is to claim the 60% under education and medical insurance instead, where you still have room.

That leaves your education and medical insurance total at RM2,018.01 + RM140.94 = RM2,158.95. The cap for YA 2025 is RM4,000, so you have another RM1,841.05 of room remaining, worth filling if you have additional qualifying premiums.

Before You File

A few things worth sorting out before you submit your return.

If you share policies with your spouse, only one of you can claim the relief for each policy. It’s worth deciding between yourselves who claims what before you file, particularly for joint policies or policies where either spouse is listed as the premium payer. Takaful works the same way.

PRS contributions need to have been made before 31 December 2025 to count for YA 2025. If you missed the deadline, note it down for next year — contributions made in January won’t count retroactively.

Keep your annual insurance statements, premium receipts, and policy documents. LHDN has seven years to audit your return, so these aren’t documents to delete once you’ve filed.

For a full breakdown of all the changes to tax reliefs for YA 2025, read our Income Tax Malaysia: What’s New for YA 2025? guide. For the complete list of everything you can claim this year, see Everything You Should Claim As Income Tax Relief.

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Pugaleshwaran Raja Kumaran

Pugaleshwaran Raja Kumaran is a Tax Executive Director at ThinkTX Consultants, with over a decade of experience delivering strategic and practical tax solutions. He advises high-net-worth individuals, multinational corporations, and growing businesses, helping them manage complex tax matters with clarity and confidence.

He has extensive experience across a broad range of tax engagements, including corporate tax compliance, Capital Gains Tax (CGT), withholding tax, stamp duty, Real Property Gains Tax (RPGT), Sales and Service Tax (SST), and advisory on inbound and outbound investments. He also leads practice areas covering tax incentives, tax audits and investigations, private client advisory, tax due diligence, and e-Invoicing advisory, providing comprehensive support across the business life cycle.

Beyond client advisory, Pugaleshwaran actively contributes to the tax profession through writing and speaking on Malaysian tax policy, regulatory developments, and industry best practices. His work has been published by the International Bureau of Fiscal Documentation (IBFD) and Wolters Kluwer (CCH), including contributions to Malaysia’s Sales and Service Tax (SST) content updates.

Professional Affiliations

• Licensed Tax Agent registered with the Ministry of Finance (MOF)
• Member of the Chartered Tax Institute of Malaysia (CTIM)
• Member of the International Fiscal Association (IFA)
• Industrial Advisor to HELP Academy’s Accounting and Finance Programme

As a trusted tax partner of RinggitPlus, Pugaleshwaran reviews and verifies Malaysian taxation content to ensure it is accurate, compliant, and relevant for everyday Malaysians.

About THE AUTHOR

Pugaleshwaran Raja Kumaran

Pugaleshwaran Raja Kumaran

Pugaleshwaran Raja Kumaran is a Tax Executive Director at ThinkTX Consultants, with over a decade of experience delivering strategic and practical tax solutions. He advises high-net-worth individuals, multinational corporations, and growing businesses, helping them manage complex tax matters with clarity and confidence. He has extensive experience across a broad range of tax engagements, including corporate tax compliance, Capital Gains Tax (CGT), withholding tax, stamp duty, Real Property Gains Tax (RPGT), Sales and Service Tax (SST), and advisory on inbound and outbound investments. He also leads practice areas covering tax incentives, tax audits and investigations, private client advisory, tax due diligence, and e-Invoicing advisory, providing comprehensive support across the business life cycle. Beyond client advisory, Pugaleshwaran actively contributes to the tax profession through writing and speaking on Malaysian tax policy, regulatory developments, and industry best practices. His work has been published by the International Bureau of Fiscal Documentation (IBFD) and Wolters Kluwer (CCH), including contributions to Malaysia's Sales and Service Tax (SST) content updates.

Professional Affiliations

• Licensed Tax Agent registered with the Ministry of Finance (MOF)
• Member of the Chartered Tax Institute of Malaysia (CTIM)
• Member of the International Fiscal Association (IFA)
• Industrial Advisor to HELP Academy's Accounting and Finance Programme

As a trusted tax partner of RinggitPlus, Pugaleshwaran reviews and verifies Malaysian taxation content to ensure it is accurate, compliant, and relevant for everyday Malaysians.

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