Subsidised Micro-Takaful and the Financial Well-Being of Low-Income Households in Malaysia: Evidence from the Perlindungan Tenang Voucher
DOI:
https://doi.org/10.32890/ijib2026.11.2.2Keywords:
Micro-Takaful, Subsidy, Financial Well-Being, Out-of-Pocket Health Expenditure, Difference-in-DifferencesAbstract
This paper evaluates the Perlindungan Tenang Voucher (PTV), a Malaysian government subsidy that enabled low-income households to buy micro-takaful and micro-insurance cover. Using a survey of 599 heads of household who reported on the periods before and after the intervention, a difference-in-differences model compares the change in health expenditure of PTV beneficiaries with that of non-beneficiaries, and the same comparison is made for households holding other takaful or insurance policies. Kaplan–Meier estimates and a Cox proportional hazards model describe the risk of a hospital visit, and a logit model identifies which households hold unsubsidised cover. Health expenditure fell for all households after the intervention, but by less among PTV beneficiaries than among non-beneficiaries, so the voucher did not by itself produce a measurable reduction in out-of-pocket spending; this is consistent with the very small number of claims made under the programme. Households with other takaful or insurance policies, by contrast, recorded a large relative fall. The risk of a hospital visit rises with household spending and chronic illness, and unsubsidised cover is more common among households with higher income, more education and more assets. Because pre-intervention values were recalled and households chose whether to use the voucher, the estimates are best read as associations. A premium subsidy alone is not enough: a renewed programme should simplify claims, tell beneficiaries what they are covered for and match benefits to the health costs that low-income households face.
Downloads
References
Aliyu, S., & Yusof, R. M. (2017). A panel survival analysis for Islamic banks. International Journal of Economics, Management and Accounting, 25(2), 381–410.
Alokla, J., Daynes, A., Pagas, P., & Tzouvanas, P. (2023). Solvency determinants: Evidence from the Takaful insurance industry. The Geneva Papers on Risk and Insurance – Issues and Practice, 48, pages 847–871.
Arifin, J., Bakar, N. A., Ghazali, P. L., Remli, N., & Muhammad, H. (2020). The role of satisfaction in mediating trust, commitment and loyalty in family Takaful. The Journal of Management Theory and Practice (JMTP), 28–34.
Aziz, N., & Razak, S. A. (2019). Survival analysis in insurance attrition. AIP Conference Proceedings, 2184(1). AIP Publishing.
Cleves, M., Gould, W., Gutierrez, R. G., & Marchenko, Y. V. (2010). An introduction to survival analysis using Stata (3rd ed.). Stata Press.
Cox, D. R. (1972). Regression models and life-tables. Journal of the Royal Statistical Society: Series B (Methodological), 34(2), 187–220.
Fauzi, M. P. N. F. N., & Laldin, M. A. (2022). Micro-takāful scheme for protecting low-income households’ homes in Malaysia. ISRA International Journal of Islamic Finance, 14(3), 303– 314.
Fredriksson, A., & Oliveira, G. M. D. (2019). Impact evaluation using difference-in-differences. RAUSP Management Journal, 54(4), 519–532.
FWD Takaful. (n.d.-a). FWD Kasih. https://www.fwd.com.my/direct/kasih/
FWD Takaful. (n.d.-b). FWD Takaful offers micro-takaful plan with FWD Kasih [News release]. https://www.fwd.com.my/news-release/fwd-takaful-offers-micro-takaful-plan-with-fwd-kasih/
Gertler, P. J., Martinez, S., Premand, P., Rawlings, L. B., & Vermeersch, C. M. (2016). Impact evaluation in practice (2nd ed.). World Bank Publications.
Haron, A., & Taylor, D. (2009). Risk management in takaful. In S. Archer, R. A. A. Karim, & V. Nienhaus (Eds.), Takaful Islamic insurance: Concepts and regulatory issues (pp. 169–191). Wiley.
Kalbfleisch, J. D., & Prentice, R. L. (2002). The statistical analysis of failure time data (2nd ed.). Wiley.
Kaplan, E. L., & Meier, P. (1958). Nonparametric estimation from incomplete observations. Journal of the American Statistical Association, 53(282), 457–481.
Lane, W. R., Looney, S. W., & Wansley, J. W. (1986). An application of the Cox proportional hazards model to bank failure. Journal of Banking & Finance, 10(4), 511–531.
Miao, Y., Gu, J., Zhang, L., He, R., Sandeep, S., & Wu, J. (2018). Improving the performance of social health insurance system through increasing outpatient expenditure reimbursement ratio: A quasi-experimental evaluation study from rural China. International Journal for Equity in Health, 17, 1–13.
Mohd Hassan, N. Z. A., Mohd Nor Sham Kunusagaran, M. S. J., Zaimi, N. A., Aminuddin, F., Ab Rahim, F. I., Jawahir, S., & Abdul Karim, Z. (2022). The inequalities and determinants of households’ distress financing on out-of-pocket health expenditure in Malaysia. BMC Public Health, 22(1), 449.
MyPTV. (n.d.-a). Perlindungan Tenang Voucher programme. https://www.myptv.my/
MyPTV. (n.d.-b). Frequently asked questions. https://www.myptv.my/faq
Pappas, V., Ongena, S., Izzeldin, M., & Fuertes, A.-M. (2017). A survival analysis of Islamic and conventional banks. Journal of Financial Services Research, 51(2), 221–256.
Said, R., Ismail, N., & Ismail, N. W. (2020). Determinants of out-of-pocket health expenditure among the low-income group in Malaysia. International Journal of Academic Research in Business and Social Sciences, 10(10), 292–311.
Salami, M. A., Tanrivermis, H., & Tanrivermis, Y. (2024). Evaluation of the management soundness of the Takaful industry in selected countries. Journal of Islamic Marketing, 15(4), 945–962.
Shah, S., Jha, N., Khanal, V. K., Nepal Gurung, G., Sharma, B., & Shrestha, M. (2022). Utilisation of social health security scheme among the households of Illam district, Nepal. PLoS ONE, 17(5), e0265993.
Thomas, A., Gangopadhyay, K., Balooni, K., Balasubramanian, S., & Padmanabhan, M. (2024). Is government health subsidy targeted enough in India? Evidence from a tertiary hospital. International Journal of Public Administration, 47(9), 579–599.
Van Doorslaer, E., O’Donnell, O., Rannan-Eliya, R. P., Somanathan, A., Adhikari, S. R., Garg, C. C., … Zhao, Y. (2007). Catastrophic payments for health care in Asia. Health Economics, 16(11), 1159–1184.
Wagstaff, A., & Lindelow, M. (2008). Can insurance increase financial risk? The curious case of health insurance in China. Journal of Health Economics, 27(4), 990–1005.
Whalen, G. (1991). A proportional hazards model of bank failure: An examination of its usefulness as an early warning tool. Economic Review, Federal Reserve Bank of Cleveland, 27(1), 21–31.
Wheelock, D. C., & Wilson, P. W. (2000). Why do banks disappear? The determinants of U.S. bank failures and acquisitions. Review of Economics and Statistics, 82(1), 127–138.
World Bank. (n.d.). World Development Indicators: Out-of-pocket expenditure (% of current health expenditure). https://data.worldbank.org/indicator/SH.XPD.OOPC.CH.ZS
Downloads
Published
Issue
Section
License
Copyright (c) 2026 International Journal of Islamic Business
This work is licensed under a Creative Commons Attribution 4.0 International License.
