Key takeaways
- PERKESO's LINDUNG KENDIRI covers Malaysian self-employed people in 20 sectors for injuries and occupational diseases from their work, with four plans from RM13.10 to RM49.40 a month, but it does not pay for illness or off-work accidents.
- Since the Gig Workers Act 2025 came into force on 31 March 2026, platforms must register e-hailing drivers and delivery riders with PERKESO and deduct 1.25% of daily task earnings, not counting tips or incentives.
- On an irregular income in Malaysia, buy in this order: SOCSO, a medical card, critical illness or disability cover, then life cover sized to your debts and dependants, with premiums set against your lowest-earning months.
- Budget 2027 proposes that from YA 2027 mandatory LINDUNG KENDIRI contributions qualify for the RM350 SOCSO relief, with up to RM150 extra relief for voluntary contributions in the other 17 sectors.
- With no employer adding 12% or 13% to your EPF, i-Saraan gives a 20% government incentive on voluntary contributions, up to RM500 a year, or up to RM600 under i-Saraan Plus for e-hailing and p-hailing drivers.
- Great Eastern policies have a 30-day grace period, and a traditional policy with cash value can keep running on an automatic premium loan, so one slow month does not have to mean losing your cover.
What insurance should a self-employed person in Malaysia buy?
When you work for an employer, a lot of protection arrives without you noticing: SOCSO taken from your pay, EPF with the employer's share on top, often a company medical card, and paid medical leave. The day you go freelance, open your own shop or drive full time for a platform, most of that stops. The first step is to see exactly what has gone.
| Protection | As an employee | As a self-employed person |
|---|---|---|
| SOCSO | Employment injury cover plus invalidity and survivors' cover for any cause | LINDUNG KENDIRI: injuries and occupational diseases from your own work only |
| EPF | Employer adds 13% (salary RM5,000 and below) or 12% (above RM5,000) for staff under 60, according to KWSP | Only what you put in yourself; i-Saraan adds a 20% government incentive, up to RM500 a year |
| Medical cover | Often a company group medical card, which usually ends when you leave the job | Only the medical card you buy yourself |
| Income when sick | Paid medical leave | No work, no income, unless you have cover that pays you |
| Losing your work | EIS job loss benefits under PERKESO | No EIS; the business absorbs the loss |
So, in plain words, a self-employed person in Malaysia usually needs four layers, in this order:
- SOCSO (LINDUNG KENDIRI) if your work is in one of PERKESO's 20 sectors. It is the cheapest layer and covers accidents while you work.
- A medical card for hospital bills from illness or accidents, because the self-employed scheme does not pay for illness. My Great Eastern medical card guide explains the plans and deductibles.
- Income replacement: critical illness cover that pays a lump sum, and where it fits, hospital income or disability benefits. Great Eastern's own health insurance guide describes disability income cover as useful for the self-employed and anyone without income protection from an employer.
- Life and TPD cover sized to your debts and the people who depend on you.
Retirement savings through EPF i-Saraan run alongside this list, not instead of it. If you are just starting out and money is tight, layers 1 and 2 come first.
What "income protection" really means in Malaysia
Few people here buy a pure disability income policy. In practice your income is protected by a mix of covers, each doing one job:
- Critical illness: a lump sum when a covered illness is diagnosed, to live on while you recover. See my critical illness guide for how much to aim for.
- Hospital income: a daily cash amount for each day in hospital, such as the IL Hospitalisation Benefits Rider in Great Eastern's list of riders.
- Premium waiver riders: if critical illness or disability strikes, future premiums are waived, so the cover stays in force without you paying.
- Personal accident cover, whose benefits can include a weekly indemnity while an accident keeps you off work.
- LINDUNG KENDIRI temporary disablement benefit of RM30 to RM105.33 a day, but only for injuries from your self-employed work.
Can self-employed people join SOCSO? LINDUNG KENDIRI and the Gig Workers Act
Yes. PERKESO's Self-Employment Social Security Scheme, now called LINDUNG KENDIRI, runs under the Self-Employment Social Security Act 2017. It began on 1 June 2017 as compulsory for taxi, e-hailing and bus drivers and was extended to 20 sectors from 1 January 2020, according to PERKESO. You qualify if you are a Malaysian citizen or permanent resident who works for yourself to earn a living, with no age limit.
The 20 sectors are wide: passenger transport, goods or food transport, agriculture, livestock, forestry, fisheries, food, construction, manufacturing, hawkers, accommodation premises, online business, information technology, data processing, agents, professional services, support services, arts, household services, and beauty and healthcare. The Budget 2027 tax measures describe three of them as mandatory: passenger transport, goods or food transport, and hawkers. The other 17 are voluntary.
| Plan | Insured monthly earning | Per month | Per year |
|---|---|---|---|
| 1 | RM1,050 | RM13.10 | RM157.20 |
| 2 | RM1,550 | RM19.40 | RM232.80 |
| 3 | RM2,950 | RM36.90 | RM442.80 |
| 4 | RM3,950 | RM49.40 | RM592.80 |
You register and pay through PERKESO's Prihatin app or Prihatin web. Cover starts from the date and time your contribution is paid and recognised on the receipt, so a payment made after an accident does not cover that accident.
What LINDUNG KENDIRI pays
- Free treatment at PERKESO panel clinics or government hospitals for an injury from your work (including travel for it) or an occupational disease.
- Temporary disablement benefit when you are on medical leave of at least 4 days including the day of the accident: RM30 to RM105.33 a day.
- Permanent disablement and dependants' benefits worked out on 90% of the insured monthly earning you selected.
- A constant attendance allowance of RM500 a month, rehabilitation, and a funeral benefit of the actual cost or RM3,000, whichever is lower.
The plan you pick sets the benefit. A driver who earns RM4,000 a month but stays on the RM1,050 plan will have benefits worked out on RM1,050.
Gig workers: what changed on 31 March 2026
The Gig Workers Act 2025 (Act 872) came into force on 31 March 2026, Bernama reported. Platform providers must make sure their gig workers are registered under LINDUNG KENDIRI and deduct contributions automatically at 1.25% of daily task earnings, without touching tips or incentives. FMT adds that cover begins once you register with a platform and accept your first job, stays active on days with no jobs, and can be checked in the Prihatin app.
What the Act does not give you, as FMT points out, is invalidity cover for conditions that are not work related, or EPF retirement savings. That gap is exactly where private insurance and i-Saraan come in. For the full SOCSO picture, read my PERKESO (SOCSO) guide.
Grab drivers and delivery riders: what protection do you need?
If you drive e-hailing or ride for a delivery app, you carry three different risks: damage to your vehicle, passengers and other road users; injury or illness to yourself; and the income you lose while you cannot work. Each needs its own cover.
| Risk | What covers it | Watch out for |
|---|---|---|
| Accident during a paid trip | E-hailing motor cover on the car (daily or annual) | A private-only car policy may not cover a paid trip |
| Injured while working | LINDUNG KENDIRI, deducted by the platform | Benefits follow the plan you chose, not your real earnings |
| Falling ill (dengue, heart disease, cancer) | Medical card and critical illness cover | LINDUNG KENDIRI does not pay for illness |
| Injured off duty | Personal accident cover | Motorcycling is on the common PA exclusion list, so riders must read the wording |
| Death or total disability | Life and TPD cover | LINDUNG KENDIRI's dependants' benefit only applies to death from a work injury |
| Retirement | EPF i-Saraan Plus | 20% incentive, up to RM600 a year |
Budget 2027, tabled on 9 October 2026, adds help with contributions. The Star and PERKESO list a 35% government matching incentive on PERKESO contributions for e-hailing and p-hailing workers, rising to 50% if the platform also shares the cost, and a 70% matching incentive for the self-employed in the 17 non-mandatory sectors. For EPF, i-Saraan Plus gives e-hailing and p-hailing drivers a 20% incentive of up to RM600 a year (RM6,000 over a lifetime); you need to contribute RM3,000 in a year to receive the full RM600. Budget measures apply only once the government puts them into effect, so check PERKESO and KWSP for the start dates.
I do not insure motorcycles, but for car drivers I arrange e-hailing insurance with the roadtax, and for everyone I look after the personal side: medical card, critical illness and life cover. If you only drive part time and still have a day job, check your company cover first, then fill the gaps.
My income goes up and down: how should I pay premiums without the policy lapsing?
The most common mistake I see with self-employed clients is buying cover in a good month and dropping it in a bad one. A policy that lapses after two years gave you two years of cover and then nothing, and buying again later costs more and may come with exclusions for anything that showed up in between. A few habits make a big difference:
- Budget on your lowest months. Look at the last 12 months and set your total premiums against the three weakest months, not the average.
- Pay yearly after your peak season, or monthly by auto-debit. If your income comes in seasons (festive orders, year-end projects), paying the annual premium right after the busy period takes it off your mind. If income is spread out, monthly auto-debit avoids a missed payment.
- Keep a small premium buffer of a few months' premiums in a separate savings account.
- Use a deductible to keep the medical card affordable if you have savings. In Great Eastern's own example, a plan with a RM500 deductible and 10% co-insurance leaves you paying about RM1,450 of a RM10,000 bill.
- Add a premium waiver rider where it is offered. Great Eastern's riders include waivers that stop premiums if critical illness or disability happens, which matters most when your own work is your only income.
If a month is tight, these are the options on a Great Eastern policy, from its page on keeping insurance covered:
| Option | What happens | What you give up |
|---|---|---|
| Pay within the 30-day grace period | The policy carries on as normal | Nothing, if you pay in time |
| Automatic premium loan (traditional policy with cash value) | The unpaid premium is paid by a loan against the cash value at the end of the grace period | Interest on the loan; runs only until the cash value is used up |
| Reduced paid-up | No more premiums; cover continues for the original term | A lower sum assured |
| Extended term | No more premiums; the original sum assured for a shorter period | Riders end; only on some policies |
| Investment-linked policy | Policy fees and insurance charges keep being deducted from your investment value | Your cover depends on that value lasting |
For grace periods, lapse and reinstatement in detail, see my guide on what happens when you stop paying premiums, and for investment-linked plans, my ILP guide. Before cancelling anything to save money, talk to me: lowering the sum assured or dropping one rider is often enough, as explained in changing a policy midway.
How much life insurance does a business owner need?
There is no fixed multiple of income that fits everyone, and for a business owner "income" is hard to pin down anyway. I work it out from what your family would need to pay, minus what they already have. For business owners, two items are often missed: business loans you have personally guaranteed, and the fact that business assets may be hard to sell quickly at a fair price, so I leave them out of the "already have" column.
Worked example (assumptions are an example only): a 40-year-old sole proprietor running a renovation business in Seri Kembangan, married with two children aged 6 and 9.
| Item (example) | Amount |
|---|---|
| Housing loan balance | RM400,000 |
| Business loan he has personally guaranteed | RM150,000 |
| Family living costs: RM5,000 a month for 10 years | RM600,000 |
| Children's education fund, RM100,000 each | RM200,000 |
| Final expenses and estate administration | RM30,000 |
| Total needs | RM1,380,000 |
| Less: existing life cover | (RM300,000) |
| Less: EPF balance | (RM120,000) |
| Less: savings and fixed deposits | (RM80,000) |
| Gap to cover | RM880,000 |
Base the living costs on what the family really spends each month, not on your best year. Then the gap can be filled in parts, which usually costs less than one big policy: the housing loan with an MLTA or MRTA, the business loan with term cover that matches its tenure, and the family income with term or whole life cover. My guide on how insurance, EPF and savings fit together walks through the same method.
If you run the business with partners, there is a second question: what happens to your share if you die or fall seriously ill. My keyman and buy-sell guide covers that. Finally, make sure the money reaches the right people quickly, with a proper insurance nomination and a will.
What tax relief can the self-employed claim on insurance, SOCSO and EPF?
Self-employed people claim the same personal reliefs as employees when they file. For the Year of Assessment 2025, LHDN lists these reliefs that matter here:
| Relief | Limit (YA 2025) | What counts for you |
|---|---|---|
| Life insurance or family takaful premiums, or additional voluntary EPF | RM3,000, within the RM7,000 life insurance and EPF relief | Premiums on your own life policies |
| EPF contributions, including voluntary contributions | RM4,000, within the same RM7,000 | Your i-Saraan contributions |
| Insurance for education or medical benefit | RM4,000 | Medical card premiums |
| Deferred annuity and PRS | RM3,000 | Private retirement scheme contributions |
| SOCSO | RM350 | Described in the Budget 2027 papers as relief on private sector employees' contributions |
The Budget 2027 tax measures propose two changes from the Year of Assessment 2027: mandatory LINDUNG KENDIRI contributions (passenger transport, goods or food transport and hawkers) come under the existing RM350 SOCSO relief, and voluntary contributions in the other 17 sectors, and to LINDUNG 24 Jam, get an additional relief of up to RM150.
Keep your Prihatin contribution receipts, your EPF statement and your insurers' yearly premium statements together, so filing takes minutes. For what counts and where to key it in, see my insurance tax relief guide. This is general information, not tax advice.
What to do next, with my help
If you are self-employed, freelancing or driving for a platform, here is a short checklist you can do this week:
- Open the Prihatin app and check that your LINDUNG KENDIRI registration is active and the plan suits your income.
- List what you already have: policies, any medical card, EPF balance and savings.
- Write down your debts, including any business loan or hire purchase you have guaranteed.
- Note your lowest monthly income from the past year. That sets your premium budget.
Then send it to me on WhatsApp at 016-914 0086. I will go through it with you in Mandarin, English or Cantonese, show you what is already covered and where the real gaps are, and suggest the order to fill them within your budget. Many of the people I advise in Seri Kembangan, Puchong, Cheras and around KL and Selangor run their own business, so I am used to irregular income and seasonal cash flow. No hard selling: if SOCSO and what you already have are enough for now, I will tell you so.