SIKR 2.0 provides lifeline for Malaysia's low-income households with free insurance protection
Under SIKR 2.0, compensation has been increased to RM10,500 for natural deaths, RM25,500 for accidental deaths, and RM10,500 for permanent disabilities caused by accidents.
AZHAR ISMAIL
Efforts by the government to tackle poverty, particularly to eradicate egregious poverty, are not solely focused on aid programmes.
The government has taken a proactive step by introducing a social protection scheme to ensure that vulnerable groups, especially those categorised as poor and lower income groups, are not neglected but instead receive appropriate protection in the event of any misfortune or disaster.
The social protection scheme is essential for this group given the current economic challenges and ongoing health threats, compounded by the rising cost of living.
The government acknowledges that vulnerable groups, particularly the poor and lower income groups, deserve special attention to protect them from being further burdened by disasters affecting their families.
Additionally, the government is aware that nearly all vulnerable groups in Malaysia lack insurance coverage. This is supported by a study by the Malaysian Takaful Association (MTA), which revealed that approximately 60 per cent of Malaysia’s B40 population still do not have takaful or insurance coverage.
As such, to prepare poor households for unforeseen risks and ensure their welfare is preserved, the government has introduced an insurance protection plan known colloquially as the Skim Insurans Kesejahteraan Rakyat (SIKR).
This insurance scheme has been extended to all heads of households (KIR) who are poor and are registered in the national eKasih database.
SIKR is a government-sponsored, exclusive, shariah-compliant group takaful plan that offers free coverage for 300,000 poor household heads registered under the eKasih database, under the purview of the Implementation Coordination Unit, Prime Minister’s Department (ICU JPM).
SIKR is exclusively managed by an appointed insurance company with a one-year term plan and provides compensation or coverage to policyholders in the event of natural death, accident, or permanent total disability due to unforeseen circumstances, according to the rates stipulated in the policy.
The insurance registration process is carried out automatically based on the list of poor individuals registered in the eKasih database.
Free protection funding
The first SIKR series was launched in 2022, with a government premium contribution of RM13.4 million covering 268,887 eKasih household heads.
The government successfully financed each household head with a RM50 premium for one year of protection.
In the event that a household head dies from natural causes, the next of kin, family members, or household members will receive RM10,000 in benefits or compensation.
In the case of accidents causing permanent disability or impairment, RM10,000 will be paid out, and in the event of accidental death, compensation of RM20,000 will be given.
From Sept 1, 2022 to Dec 31, 2023 (Phase I and II), a total of 1,377 household heads received benefits or compensation amounting to RM14.3 million due to deaths and accidents that occurred.
The compensation received helps family members face unexpected risks and ensures households recieve the care and financial help needed to navigate during dire times.
On the technicality side, the claim procedure for SIKR is simple, requiring only the submission of a death certificate or medical documents (in cases of disability due to accidents) to the State Development Office (ICU JPM).
This is maily for verification purposes before the compensation process is managed by the responsible insurance company.
SIKR 2.0 benefits 300,000 households
The government sees the SIKR initiative as worthy of continuation with the launch of SIKR 2.0, aimed at further protecting the welfare and social interests of these groups by improving the benefits provided.
Under SIKR 2.0, compensation has been increased to RM10,500 for natural deaths, RM25,500 for accidental deaths, and RM10,500 for permanent disabilities caused by accidents.
On Aug 17, 2024, during the closing ceremony of the MADANI Rakyat 2024 Programme for the Southern Zone at Dataran Universiti Teknologi Malaysia (UTM) Johor, Prime Minister Datuk Seri Anwar Ibrahim launched SIKR 2.0 to reaffirm the government’s commitment to providing social protection for the poor in Malaysia.
The government also approved an allocation of RM18 million to assist 300,000 household heads through SIKR 2.0 from June 1, 2024 to May 31, 2025.
During the event, the Prime Minister also presented RM10,500 in compensation to three next-of-kin recipients to help ease their burden and sustain their livelihoods.
To date, a total of 431 beneficiaries have received compensation payments, while 1,019 cases are currently being processed.
These figures, especially the benefits enjoyed by the eKasih poor groups, reflect the effectiveness of the government’s initiative in protecting its people.
Furthermore, it also demonstrates the ongoing commitment and concern of the MADANI Government, particularly in upholding the value of compassion—one of the core pillars of MADANI values.
The government’s initiative through SIKR has had a high impact on the poor income groups in obtaining appropriate social protection.
SIKR is also seen as a forward-thinking strategic move in delivering social justice to targeted groups.
This is particularly important as awareness of the need for insurance protection, especially among the poor remains relatively low compared to other Asian countries.
The SIKR initiative also indirectly educates the public—especially the poor and low income groups—on the importance of having social protection such as insurance.
*Azhar Ismail is Deputy Director of the Corporate Communication & Media Unit, ICU JPM
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