Malaysia's central bank Bank Negara Malaysia (BNM) has announced that the design of the base medical and health insurance or takaful product, introduced as part of Budget 2026, is expected to be finalised by the end of 2025 with a planned launch in 2027 according to a news report on the web-portal https://www.thevibes.com/.
The news report quoting a statement by BNM, said the initiative will be supported by a MYR60m joint allocation from the government and industry. It seeks to accelerate health reforms aimed at curbing rising medical costs while enhancing protection for Malaysians.
Malaysian prime minister Datuk Seri Anwar Ibrahim, who is also the country’s finance minister, had revealed during his budget 2026 presentation earlier this month that the fund will accompany the implementation of the diagnosis related group system.
To encourage broader insurance participation, the existing personal income tax relief of up to MRY3,000 for life insurance or takaful premiums covering self and spouse will be extended to include children.
In his budget proposals for 2026, Prime Minister Anwar Ibrahim said the government also plans to offer various incentives to encourage Malaysians to obtain insurance policies. The government will also extend the full stamp duty exemption on small-value insurance policies or takaful certificates purchased by individuals and micro, small and medium-sized enterprises to 2028.
BNM has also highlighted the expansion of the iTEKAD social finance initiative, which now aims not only to spur entrepreneurship and enhance protection but also to generate employment opportunities for vulnerable groups.
An extra MYR35m has been allocated in matching grants to strengthen the financial resilience and capacity of these segments.
BNM further stated that these funds will be matched with social finance resources such as donations, corporate social responsibility contributions, zakat, and cash waqf.