“Hello LSX Lawfirm, I have a need to buy life insurance for myself and my family members in the near future. However, I do not fully understand what life insurance is and what I need to pay attention to before buying insurance. life. Please advise me. Thank you, Lawyer.”. Thanks for your question. It can be said that life insurance is considered one of the safest and most effective forms of financial backup. However, not everyone understands the policy, benefits, or meaning of life insurance. So what is life insurance? Today, LSX Lawfirm will give you an article about “Notes before buying life insurance in Vietnam“, as follows:
Legal grounds
Law on insurance business 2000
Law amending and supplementing a number of articles of the Law on insurance business in 2010
What is life insurance?
Life insurance is a product of insurance companies to protect people against risks related to health, body, and life. Participants agree and sign an insurance contract with the insurance company on the responsibility to pay the premium in full and on time.
An insurance contract is an agreement between an insurance buyer and an insurance enterprise, whereby the insurance buyer must pay a premium, and the insurance enterprise must pay insurance premiums to the beneficiary or indemnify the beneficiary. insurance when the insured event occurs (According to Clause 1 – Article 12 – Law on insurance business).
The essence of life insurance is a safe way of providing financial protection for the future with the aim of replacing income sources when the participants face unexpected risks (life insurance benefits). That is why insurance Life has a great meaning to human life, it not only helps stabilize life when unexpected risks occur but is also a way to share risks in the community by taking the majority to compensate for the few.
Types of life insurance today
Term life insurance
An insurance practice for the event that the insured lives up to a certain period of time, whereby the insurer must pay the insurance premiums to the beneficiaries if the insured still lives to the agreed period in an insurance contract.
Term life insurance
Insurance business for the case of the death of the insured within a certain period of time. Accordingly, the insurer must pay the insurance premium to the beneficiary; if the insured dies within the period agreed upon in the insurance contract.
Periodic payment insurance
Insurance service for the insured person to live up to a certain period of time; After that time limit, the insurance enterprise must make periodic insurance payments to the beneficiaries as agreed in the insurance contract.
Mixed insurance
It is an insurance business that combines term life insurance and term life insurance. Accordingly, the insurance company pays the insurance amount when the insured is alive until the end of the policy or when the insured dies during the policy term.
Lifetime insurance
Insurance business for the event the insured person dies at any time during his or her life (Clause 12, Article 3 of the Law on Insurance Business).
Investment-linked insurance
Is a life insurance product that helps you satisfy two purposes at the same time: financial protection against risks and financial savings and investment. In which, the profitable investment will be the main factor. The insurance premium is also an investment of the insured.
Pension insurance
Is a type of life insurance that insurance companies offer to supplement the insured at the end of working age. There are two types of pension insurance: for individuals and for groups of employees.
Meaning of life insurance
The main purpose is to protect against risk, not to save profit
Although life insurance still ensures future profitability like savings channels, the main purpose of life insurance is to protect against unexpected risks, so the profitability cannot be as high as when saving money. bank money.
Therefore, you should not compare insurance and savings or buy insurance from a good profit perspective. Instead, you should clearly define your needs to choose between the right risk protection insurance and the most profitable savings through insurance benefits.
A long-term financial channel to prepare for the future
The future is a long way and it is not known yet what good or bad will come. So, the thing to do is to plan carefully at this point. One of the ways to provide long-term financial protection for the future is life insurance. In the later years of life, the risk will be greater, so choosing to participate in life-protected products will help the insured always feel secure because there is insurance support.
Protects only against unforeseen risks, not inherent risks
When it comes to life insurance, it is impossible not to mention risks – unexpected bad things happen that cause loss, loss, and danger to people. Insurance is associated with risks, but not all risks are guaranteed life insurance benefits.
Only risks that occur unintentionally causing damage to the health, body, and life of the insured during the effective period of the policy are insured and paid. In addition, insurance will not cover risks that are intentional or inherent and present prior to the effective date of the policy unless notified and approved by the company.
Not having to protect against “all” risks
Not only life insurance but all insurance products have also limited protection and do not protect against “all” types of risks. That is why, before signing an insurance contract, participants need to know what risks they will be protected against, in which case each risk is paid, the benefits received how, and what specific cases will be excluded.
The policyholder should note that the insurance will not pay in cases such as death by suicide within 2 years, a criminal offense, HIV/AIDS or a death sentence; cases of intentionally or intentionally causing harm, pre-existing diseases, and cases of breaking the law…
It is not too difficult to understand what life insurance is, but if you want to understand more deeply, do not ignore important things to know about life insurance such as the nature of insurance, insurance companies, types, or understanding. basic features to avoid confusion later.
Things to consider before buying life insurance
Correct understanding of life insurance
The main purpose is to protect against risk, not to save profit
- It is a long-term financial channel to prepare for the future
- Protects only against unforeseen risks, not pre-existing ones
- Not having to protect against all kinds of risks
Choose a reputable insurance company
Reputation is a top priority when choosing an insurance company. You need to consider the level of credibility through the trust of customers through acquaintances, consultants, and official press information about that insurance company.
Find out the right life insurance package for your needs
Different insurance plans will have different benefits. You need to base on the actual needs of your close friends and family to make a decision to choose an insurance product. There are two common types of insurance:
Different insurance plans will have different benefits. You need to base on the actual needs of your close friends and family to make a decision to choose an insurance product. There are two common types of insurance:
- Insurance for protection such as health, injury, death, etc.
- Investment insurance such as financial accumulation, educational benefits or a comfortable retirement, etc.
Take the time to consider the value, carefully read all contract terms; Thoroughly understand the problems in the contract through the answers of the consultant or directly to the insurance company for advice.
Choose insurance with reasonable premiums and long protection time
Life insurance needs to be maintained regularly throughout the enrollment period. You need to consider joining an insurance policy that is suitable for your family’s financial conditions to ensure your benefits. 10-15% of your income is an ideal amount you can spend on insurance.
And do not forget to choose an insurance plan with a long protection period, a lifetime is the best because the risk can come at any time.
Choose an insurance plan with a flexible premium contract
Choosing a flexible premium life insurance plan helps you increase or decrease your premium at any time; not rigidly bound. This is very beneficial for you because the average insurance period is 10 years and your income can change.
Currently, however, only a few insurance companies offer flexible policies that allow you to adjust the amount you pay each term should your income drop.
In summary, the most important thing is that you need to understand the needs of yourself and your family as well as differentiate products to choose the most beneficial insurance package for you.
Consulting service of LSX Lawfirm
Above is LSX Lawfirm’s advice on the content of the problem “Notes before buying life insurance in Vietnam“. And all the above knowledge to use in work and life. If you have any questions and need more advice and help, please contact the hotline for the reception. Lawyer X is a place that provides reputable and fast business services at reasonable prices. Customers will be extremely satisfied when using our services.
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Related questions
Article 33 of the Law on Insurance Business stipulates in detail the grounds for insurance payment, including:
– Based on the actual injury of the insured and agreed in the insurance contract.
– Based on expenses for medical examination, treatment, and rehabilitation of the insured person caused by illness or accident and as agreed in the insurance contract.
Clause 1, Article 39 of the Law on Insurance Business details these cases, specifically:
– The Insured dies by suicide within two years; from the date of payment of the first premium or from the date the insurance policy continues to take effect;
– The insured person dies or is permanently disabled due to the intentional fault of the policyholder or the willful fault of the beneficiary;
– The insured dies as a result of the execution of a death sentence.
After signing the insurance contract, the buyer should fulfill all responsibilities. Specifically:
– Pay periodical premiums according to the time limit specified in the contract.
– Keep documents and invoices after paying fees to complain when necessary.
– If any information on the contract is changed, it is necessary to immediately notify the insurance company for timely handling.
– When going abroad, it is necessary to notify the insurer in advance of the time and purpose.
Contact LSX Lawfirm
Finally, hope this article is useful for you; answer the question: “Notes before buying life insurance in Vietnam“. If you need more information, please contact LSX Law firm: at +84846175333 or Email: [email protected].
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