Vietnam: Under what circumstances does the insurer not have to compensate and pay for life insurance?
In which cases do insurers not have to pay compensation and pay for life insurance in Vietnam?
Pursuant to Article 40 of the Law on Insurance Business 2022 of Vietnam, the following cases of non-compensation and payment of insurance premiums:
- Insurers and foreign non-life insurers’ branches shall not be exempted from paying insurance indemnity and coverage in the following cases:
+ The insured is deceased within 02 years of the first payment of premium or restoration of the insurance contract’s effect;
+ The insured’s death is caused willfully and intentionally by the policyholder or the beneficiary, except as prescribed in clause 2 of this Article;
+ 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;
+ The insured’s death is caused by serving the death sentence;
+ Other cases are stipulated in the insurance contract.
- 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.
- 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 law on inheritance.
Vietnam: Under what circumstances does the insurer not have to compensate and pay for life insurance?
How to designate and change beneficiaries in a life insurance policy in Vietnam?
Pursuant to Article 41 of the Law on Insurance Business 2022 of Vietnam, it is prescribed to appoint and change beneficiaries in life insurance contracts as follows:
- The policyholder has the right to appoint beneficiaries, except for group insurance contracts.
In case the policyholder is not simultaneously an insured, the policyholder must obtain the written consent of the insured when appointing a beneficiary;
In case the insured person is juvenile or loses civil act capacity or has difficulties in cognitive, mastering the act or has limited civil act capacity, the appointment of the beneficiary must be agreed by the legal representative.
- In case there are many beneficiaries, those who are entitled to appoint beneficiaries in accordance with the provisions of this Law may determine the order or proportion of beneficiaries.
In case the order or proportion of beneficiaries is not determined, all beneficiaries are entitled to the benefit at the same rate.
- The policyholder may change beneficiaries but must obtain the written consent of the insured and must notify in writing the insurer or branch of the foreign non-life insurance enterprise.
In case the insured person is juvenile or loses civil act capacity or has difficulties in cognitive, mastering the act or has limited civil act capacity, the change of beneficiary must be agreed by the legal representative.
Insurers and branches of foreign non-life insurance enterprises must confirm in the insurance contract or other documents attached to the insurance contract after receiving the notice of the policyholder.
What regulations must the payment of life insurance premiums comply with in Vietnam?
Pursuant to Article 37 of the Law on Insurance Business 2022 of Vietnam, life insurance premiums are paid as follows:
- 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.
- 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.
- 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.
- 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.
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