An important part of planning for your financial future is getting protection and coverage for hospitalisation and medical expenses in case of an unfortunate event.
To ensure that everyone gets financial protection, some public retirement plans have put in place schemes that allow people to buy insurance easily. One such scheme is EPF, which allows members to withdraw savings from their EPF account to purchase insurance or takaful also known as Islamic insurance through its Members Protection Plan (MPP).
What Is EPF’s Members Protection Plan (MPP)?
EPF’s Members Protection Plan (MPP) lets you use savings from your EPF account to purchase exclusive insurance or takaful products from approved providers in the market.
The types of protection offered under the plan are life insurance and critical illness insurance. You can purchase multiple insurance products, subject to the balance in your EPF account.
Additionally, you can also withdraw funds to purchase insurance or takaful for your spouse and up to 10 children.
You can purchase insurance for yourself as the primary covered person and your spouse or children as dependents.
If you purchase of insurance or takaful under the Members Protection Plan, you’re also entitled to tax relief.
Types Of Insurance Plans Offered
Some of the providers offering insurance or takaful products under the Members Protection Plan include Etiqa and Prudential.
Etiqa has a critical illness plan for EPF members aged up to 65 years old, which covers 42 illnesses including cancer, heart attack and stroke. The plan offers a coverage amount of up to RM200,000.
On the other hand, Prudential offers EPF members and their spouse or children protection against death and disability through the PRUGuard Family plan.
With premium as low as RM13.80 a year per covered member, the plan provides a lump sum benefit of RM200,000 in the event that the insuree or his family member pass away or suffer from total permanent disability.
Who Can Buy Insurance Through EPF’s Members Protection Plan
To buy insurance through the Members Protection Plan, you need to be Malaysian with a minimum balance of RM100 in your EPF account.
You are not required to get a check-up to purchase the products, so those with a previous history of illness could get an opportunity to get coverage.
Your eligibility to participate is subject to the age limit imposed by insurance or takaful providers.
How To Purchase Insurance Through EPF?
You can purchase insurance or takaful products online via your i-Akaun. First, log into your i-Akaun. Then, you may select the i-Lindung tab and browse through the products offered by approved providers.
You can choose one or more products offered and be led to the provider’s portal to fill in your personal details.
You will be asked to authorise deduction of premiums from your EPF account. You can view the payment status under the Transaction History section.
Then, you will be given an acknowledgement slip from the provider to confirm your purchase.
For EPF members who are below the age of 55, they can pay for premiums through withdrawal from their Wellbeing Account.
There are mainly three EPF accounts, which are the Retirement Account, Wellbeing Account and Flexible Account. Retirement Account holds the highest percentage of our savings, with 75% of our contributions going in the account. Meanwhile, 15% of our contributions flow into the Wellbeing Account and the remaining 10% goes into the Flexible Account.
For EPF members aged between 55 and 59 years, payment for premiums is via withdrawal from Account 55.
For EPF members who are aged 60 years and above, payment for premiums is via withdrawal from their Account 55 or Gold Account.
Account 55 and Gold Account are accounts opened when EPF members reach the age of 55.
The Member’s Protection Plan is part of an initiative to help all Malaysians get social and financial security. Hence, the plans do take into the financial situation of members and tend to be relatively affordable. However, the extensiveness of the coverage may vary depending on the plan opted.
You should also consider that you’re using savings reserved for your golden years to pay for insurance. EPF helps members save for their retirement with guaranteed dividends of at least 2.5% per annum. However, members can also make voluntary top-ups to their account in any amount and enjoy dividends.
Read Also: Guide To EPF’s Voluntary Self-Contribution For Growing Your Retirement Savings
Follow Us On Telegram & Instagram!
Join our Malaysia Telegram channel (@dollarsandsensemy) and follow our Malaysia Instagram Page (@dnsmalaysia) as we bring you the latest finance content in Malaysia!
