Vietnam: From 01/01/2023, can life insurance buyers refuse to buy insurance when they have received the insurance policy?
What is life insurance according to Vietnamese regulations?
Pursuant to Clause 13, Article 4 of the Vietnam Law on Insurance Business 2022, which defines life insurance, Life insurance refers to a type of insurance designed to offer protection for an insured person who is alive or dead.
The insured object of a life insurance policy is life expectancy and human life.
Vietnam: From 01/01/2023, can life insurance buyers refuse to buy insurance when they have received the insurance policy?
Is the life insurance buyer entitled to refuse to buy insurance when it has received the insurance purchase policy in Vietnam?
Pursuant to Article 35 of the Vietnam Law on Insurance Business 2022, this content is noted as follows:
Article 35. Time limits for consideration of participation in insurance
For a term insurance contract lasting for more than one year, within 21 days of receipt of the insurance contract, the policyholder may refuse to continue to participate in insurance. Where the policyholder refuses to continue to participate in insurance, the insurance contract shall be terminated and the policyholder shall be refunded insurance premiums that they have paid after deducting reasonable costs and expenses (if any) as agreed upon in the insurance contract; the insurer shall not be obliged to pay insurance indemnity or coverage in case of occurrence of a policy event.
Accordingly, the Vietnam Law on Insurance Business 2022 has added regulations on the time to consider participating in life insurance, specifically as follows:
For insurance contracts with a term of more than 01 year, within 21 days from the date of receipt of the insurance contract, the buyer has the right to refuse to continue participating in insurance.
The policyholder may refuse to continue participating and the insurance policy will be canceled, the buyer will be refunded the premium paid after deducting the reasonable cost (if any) as agreed in the insurance contract.
How is the payment of life insurance premiums and non-compensation cases regulated in Vietnam?
Pursuant to Article 37 of the Vietnam Law on Insurance Business 2022, it is as follows:
Article 37. Payment of life insurance premiums
1. The insurer can pay insurance premiums on a one-off basis or in installments according to the time limit and approach agreed upon in an insurance contract.
2. In the cases where insurance premiums are paid in installments and the policyholder pays one or several installments of insurance premiums, if the policyholder is unable to proceed to pay further, the extended duration of payment of premiums shall be 60 days.
3. Parties can agree to restore the effect of the insurance contract that is unilaterally terminated under clause 1 of Article 26 herein within 02 years of termination when the policyholder has paid outstanding debts on insurance premiums.
4. Where the policyholder defaults on insurance premiums or fails to pay insurance premiums in full, the insurer shall not be allowed to arbitrarily deduct premiums from the surrender value of the insurance contract without the policyholder’s consent, and take legal action to request the policyholder to pay insurance premiums. This regulation shall not apply in case of group insurance.
Article 40 of the Vietnam Law on Insurance Business 2022 provides as follows:
Article 40. Insurance exclusions
1. Insurers and foreign non-life insurers’ branches shall not be exempted from paying insurance indemnity and coverage in the following cases:
a) The insured is deceased within 02 years of the first payment of premium or restoration of the insurance contract’s effect;
b) The insured’s death is caused willfully and intentionally by the policyholder or the beneficiary, except as prescribed in clause 2 of this Article;
c) The insured’s permanent injury or impairment is caused willfully and intentionally by the insured himself, the policyholder or the beneficiary, except as prescribed in clause 2 of this Article;
d) The insured’s death is caused by serving the death sentence;
dd) Other cases are stipulated in the insurance contract.
2. In the cases where there are more than one beneficiary, despite the fact that one or more beneficiaries intentionally cause death or permanent injury or impairment for the insured, the insurer or the foreign non-life insurer’s branch shall have the burden of paying insurance indemnity or coverage to the other beneficiaries under contractual terms and conditions.
3. When any situation specified in clause 1 of this Article arises, the insurer or the foreign non-life insurer’s branch shall pay the policyholder the surrender value of the insurance contract or all of the premiums already paid after deducting any reasonable costs and expenses as agreed upon in the insurance contract, except as provided in clause 2 of this Article. In case of the death of the policyholder, all of the refunds shall be treated according to Vietnam Law on inheritance.
Thus, the cases of non-compensation and payment of life insurance are prescribed as above.
The Vietnam Law on Insurance Business in 2022 takes effect from 01/01/2023.
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