Life Insurance Relief: Life Insurance Premiums & Family Takaful

What is the life insurance relief?

Life insurance premiums (or family takaful contributions) can reduce your income tax through a tax relief — a deduction from taxable income. But it is important to know: there is no separate relief specifically for life insurance. Life insurance premiums are claimed in one combined item together with EPF savings:

Source: HASiL — Tax Reliefs (Individuals), item 17 (see Official sources section).

Structure of item 17: Life insurance and EPF

Item 17 combines two sub-limits within a total of RM7,000 (limited) for YA 2025:

Subitem	Scope	Limit
(1)	Mandatory contributions to approved schemes / voluntary EPF / under written law	Limited RM4,000
(2)	Life insurance premium payments or family takaful contributions or additional voluntary EPF contributions	Limited RM3,000
Total	Item 17: Life insurance and EPF	RM7,000 (limited)

Meaning: your life insurance premiums / family takaful contributions can only be claimed up to RM3,000 a year (YA 2025), and they share the RM7,000 ceiling with the EPF claims of subitem (1).

Source: HASiL — Tax Reliefs (Individuals), item 17 YA 2025 tab (see Official sources section).

How much can be claimed?

• Life insurance premiums / family takaful contributions / additional voluntary EPF contributions: limited to RM3,000 a year.
• Whole of item 17 (Life insurance and EPF): limited to RM7,000 a year.
• Claims are reported in Form BE/B (e-Filing) under the "Life insurance and EPF" relief item.
• Keep insurance receipts/policies and EPF statements as supporting documents. The general tax record-keeping practice is 7 years (see General Ruling No. 5/2000).

Source: HASiL — Tax Reliefs (Individuals) (see Official sources section).

Simple calculation example

Mr Adam (a salaried employee) pays in YA 2025:

• Life insurance premiums: RM3,400 a year;
• Mandatory EPF contributions: RM3,600 a year;
• Additional voluntary EPF contributions: RM900 a year.

Amount claimable in item 17:

• Subitem (2): premiums RM3,400 → claimed RM3,000 (limited to RM3,000);
• Subitem (1): EPF RM3,600 + RM900 = RM4,500 → claimed RM4,000 (limited to RM4,000);
• Item 17 total: RM3,000 + RM4,000 = RM7,000 (limited).

Although Mr Adam pays more, his claim is capped at RM7,000. (The value of the tax saving depends on your marginal tax rate.)

Things to verify before publication — these items still await official HASiL confirmation — re-check with HASiL before making decisions.

• YA 2026 amounts: there is no YA 2026 tab on the Reliefs page at the review date; YA 2026 figures are not published by HASiL → re-verify before mentioning YA 2026.
• Conditions for the civil servant pensionable-scheme category: the dichotomous definition of item 17 categories should be referenced to the BE Explanatory Notes when published; do not claim without a source.
• The definition of "family takaful" is not detailed on the table page — verify the definition at fact-check.

Caveat

• Do not confuse item 17 with item 18 (PRS/Deferred Annuity) or item 19 (education & medical insurance) — separate limits.
• State the figure as "RM3,000 (limited) within RM7,000 (limited)" — do not generalize as a full RM7,000 relief for life insurance alone.

Frequently Asked Questions (FAQ)

Q. Can I claim all my life insurance premiums? A. No. Life insurance premiums are limited to RM3,000 a year (YA 2025), within the RM7,000 ceiling of item 17.

Q. I pay premiums and EPF — can both be claimed? A. Yes, both are in the same item 17. Individual sub-limits: EPF RM4,000, life insurance/family takaful RM3,000, with a maximum total of RM7,000.

Q. Are family takaful contributions eligible? A. Yes — family takaful contributions are included in the RM3,000 sub-limit of item 17. Note: the full definition of "family takaful" has not been confirmed at this review (this item still awaits official HASiL confirmation — re-check with HASiL before making decisions).

Q. Is education/medical insurance the same as life insurance? A. No. Education & medical insurance is item 19 with a separate limit — see the draft at pelepasan-premium-insurans-pendidikan-perubatan.md.

Glossary

• Tax relief — a deduction from taxable income that reduces the tax payable.
• Limited (Terhad) — maximum amount that can be claimed.
• Life insurance — an insurance policy providing financial protection on death (premiums paid by the individual).
• Family takaful — family protection based on Islamic principles (full definition not yet confirmed).
• EPF (KWSP) — Employees Provident Fund.
• PRS — Private Retirement Scheme.
• YA — Year of Assessment.