LIAM: Life insurance products exempted from GST

KUALA LUMPUR: Life Insurance Association of Malaysia says life insurance is exempted from the Goods and Services Tax (GST) which comes into effect on April 1.

“This means that policyholders who have purchased or intend to purchase life insurance products will not have to pay the 6% GST on their life insurance premiums,” it said on Friday.

The life insurance products include whole life insurance, endowment insurance, child insurance, term insurance (including mortgage insurance), education insurance and annuity products.

LIAM said while premiums for investment-linked policies will not attract GST, the fees and charges imposed on these policies such as policy fee will be subject to GST.

Non-life riders such as critical illness, medical and health, and personal accident, the premiums will be subject to GST. As a guide, non-life riders are defined as riders which do not cover natural death.

“Although GST is applicable beginning April 1, policyholders who have purchased non-life riders before 1 April 2015 will be required to pay GST on the applicable portion of insurance premium/fee/charges for insurance coverage from April 1 onwards,” it said.