Vietnam: Setting Up Life Insurance

Asia is a leading destination for expats, and Vietnam is an exciting choice for anyone looking to relocate to a new country. There are over 91,000 foreigners that call the country home from more than 100 nations.

Saigon is a common hotspot for foreigners thanks to the city’s vibrant culture. You can visit the Giac Lam Pagoda, tour the Reunification Palace and find ample work opportunities.

Foreigners in the country will find welcoming natives, great food and other attractions, but they’ll also notice high levels of air pollution and minimal environmental policies. High levels of air pollution can lead to health-related concerns and kills 60,000 people in Vietnam per year.

As an expat, it’s important to have life insurance and critical illness insurance. When choosing life insurance, you’ll have to choose between term or whole of life insurance.

Term Life Insurance for Expats

When you obtain term life insurance, you’re choosing a policy that is term-based. You’ll choose a policy that lasts for a certain duration, often 20 years, and offer protection for your family and loved ones.

That said, approximately 84% of expats don’t have sufficient life insurance coverage.

The insurance you obtain can help your loved ones in many ways:

  • Funeral costs
  • Grocery shopping
  • Education expenses
  • Healthcare costs
  • Discretionary spending

Along with your life insurance policy, you’ll also want to consider critical illness insurance. The critical illness insurance will provide you with a cash lump sum for your medical emergency.

Vietnam’s public healthcare system, which went to universal healthcare, aims to reduce the burden of healthcare on the Vietnamese. The plan expected that 80% of people would be covered by 2020.

As an expat, you’ll be asked to provide a medical certificate to show that you’re in good health. The certificate lasts for 12 months, but you can’t plan to have a heart attack or stroke. Critical illness insurance is something that you can rely on if you suffer from a serious medical condition.

If you were a victim of the COVID-19 pandemic, you’ll find that your typical insurance may not have covered your medical costs. Critical illness insurance would have covered these costs for you to seek medical care.

Expats should also obtain health insurance of some form so that while they live overseas, they don’t amass debts that they can’t overcome.

Problems with Obtaining Non-expat Insurance Policies

If you’ve looked into life insurance and other forms of insurance in your home country, you must be sure that the policy covers your lifestyle. Insurers will sell you insurance based on your:

  • Age
  • Medical history
  • Address

It’s not uncommon for expats to obtain coverage in their home country and assume that their insurance will protect them while living in Vietnam. Deep in your policy’s terms of service, there may be terms that mention that you must live in your home country for the majority of the year.

Typically, if you reside outside of your home country for six months out of the year, your policy will be void.

Even though you’ve been diligent with your payments, it’s possible that the policy is void and benefits will not be paid out to your loved ones. The most your loved ones would receive is the premiums that you paid into the policy.

If you plan on working with an insurance broker in Vietnam, you need to be able to read the entire policy. When you sign a policy, you’re entering into a contract that is enforceable by law. If you read the terms of exemptions, it’s possible that you’re entering into a contract that you don’t understand.

Expat term life insurance policies are given in a language that you understand with no translators needed during the signing. Obtaining a policy meant for expats means that you’ll have coverage across countries and won’t need to worry about which country you reside in.

These policies may require you to have a medical exam performed if you’re over 50. If you’re under 50 and in good health, you may be able to receive a policy today without the need for a medical exam.

With term life insurance, you’re helping provide security to your family if you suddenly die. Insurance is definitely a smart choice for expats in Vietnam.

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