Working Malaysians need to have an insurance coverage of about nine times their annual salary, according to a study by the Malaysian Takaful Association (MTA). However, many have inadequate insurance and the overall protection gap of 12.5 million working Malaysians in 2012 totalled MYR2.5 trillion (US$780 billion).
According to Actuarial Partners Consulting, the company commissioned by the MTA to carry out the study, Singapore and Taiwan had a lower protection gap over Malaysia, while the gap was higher in Indonesia, Thailand, Hong Kong and Vietnam. The protection gap refers to the financial needs for working adults in Malaysia up to their retirement age, against the financial consequences of death, critical illness and disability.
Meanwhile, Deputy Finance Minister Datuk Ahmad Maslan said that the government aspired to achieve a penetration rate of 75% of the total population for life insurance coverage, reported the Bernama News Agency. “The present penetration rate is still low, with takaful at 13% and life insurance 56%,” he added.