Cases in which insurance indemnity and coverage are not required to be paid in Vietnam

Cases in which insurance indemnity and coverage are not required to be paid in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases in which insurance indemnity and coverage are not required to be paid in Vietnam

According to Article 40 of the Law on Insurance Business 2022, the following cases are not required to indemnify and pay for life insurance and health insurance:

- Insurers and foreign non-life insurers’ branches shall 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 Article 40 of the Law on Insurance Business 2022;

+ 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 Article 40 of the Law on Insurance Business 2022;

+ 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 Article 40 of the Law on Insurance Business 2022.

In case of the death of the policyholder, all of the refunds shall be treated according to law on inheritance.

2. Insurable interests of life insurance policies and health insurance policies in Vietnam

Pursuant to Article 34 of the Law on Insurance Business 2022, insurable interests of life insurance policies and health insurance policies are as follows:

- The policyholder shall have insurable interests for the following persons:

+ The policyholder himself;

+ The policyholder’s spouses, parents, offspring;

+ The policyholder’s biological siblings or other persons who are in care or support relationships with the policyholder;

+ The persons having financial interests or labor relations with the policyholder;

+ Insured persons giving their written consent for purchase of health insurance policies to the policyholder.

+ At the time of conclusion of an insurance contract, the policyholder must have insurable interests.

3. Regulations on payment of life insurance premiums in Vietnam

According to Article 37 of the Law on Insurance Business 2022, the payment of life insurance premiums is 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 of the Law on Insurance Business 2022 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.

Ho Quoc Tuan

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