Insurance Law · 15.11.2024

Disability Insurance in Vietnam: Three Systems, Three Payers

In Vietnam, three separate systems answer to the word “disability”, and they have three different payers. A commercial policy bought from an insurer. The State occupational accident and disease insurance scheme. And the employer’s own duties under labour law. A claim usually enga…

Lawyer UnilawReading time: 6 min

By Lawyer Nguyen Nhu Hai – UniLaw LLC

In Vietnam, three separate systems answer to the word “disability”, and they have three different payers. A commercial policy bought from an insurer. The State occupational accident and disease insurance scheme. And the employer’s own duties under labour law. A claim usually engages more than one, and each is refused for different reasons. Sorting out which is which is the first piece of work.

Where commercial disability cover sits

Article 7(1) of the Law on Insurance Business No. 08/2022/QH15 recognises health insurance as one of the three types, and Article 33 makes the subject matter of a health insurance contract the person’s health. Decree No. 46/2023/ND-CP, Article 5, divides the health type into health and bodily insurance and medical expenses insurance. A permanent-disability benefit is written under the first; reimbursement of treatment cost under the second. Which line the policy belongs to decides whether you are claiming a defined sum or a cost actually incurred.

The occupational scheme is a different system, and it does not cancel your policy

Work accidents and occupational diseases are covered by the compulsory occupational accident and disease insurance scheme, which is governed by the law on occupational safety and hygiene and administered through social insurance rather than by a commercial insurer. It is a separate entitlement with its own assessment of impairment, and we do not set out its article numbers here.

What matters for a commercial claim is that the two do not cancel each other. Article 38 of Law No. 08/2022/QH15 provides that where the insured dies, is injured or falls ill through the direct or indirect act of a third party, the insurer must still pay under the policy and has no right of recourse against that third party, who remains liable to the insured under the law. So a benefit received elsewhere, and a claim against whoever caused the injury, sit alongside the policy rather than in place of it.

When a commercial policy pays nothing on permanent disability

Article 40(1)(c) is the provision to read first: no payment where the insured suffers permanent disability caused by the deliberate act of the insured, the policyholder or a beneficiary. Article 40(1) also excludes suicide within two years of the first premium or of reinstatement, death caused by the deliberate act of the policyholder or a beneficiary, death by execution of a death sentence, and other cases agreed in the policy.

Two qualifications. Article 40(2): where there are several beneficiaries and one of them deliberately caused the death or permanent disability, the insurer still pays the others. Article 40(3): even in the Article 40(1) cases the insurer must return the surrender value or the premiums paid less reasonable costs.

The exclusion has to be proved, and the definition read

Article 19(2) requires the insurer to state exclusions clearly, explain them fully, and hold evidence that the policyholder received that explanation and understood it at contracting. Disability policies turn on definitions — permanent versus temporary, total versus partial, the impairment percentage, the waiting period. If the refusal rests on one of those, ask for the Article 19(2) evidence before arguing the medicine.

Article 19(3) removes any late-notification exclusion where force majeure or an objective obstacle caused the delay.

Disclosure: only a deliberate misstatement lets the insurer rescind

Article 22(2) allows rescission only where the policyholder deliberately supplied incomplete or false information, and did so in order to obtain payment. An earlier injury not mentioned because the form did not ask about it is not that. Article 22(3) runs the other way, giving the policyholder the right to rescind, recover the premium and claim damages where the insurer deliberately withheld or falsified information to get the contract signed.

Twenty-one days, and cover before acceptance

Article 35: on a contract with a term over one year, the policyholder has 21 days from receiving the policy to refuse to continue, with the premium refunded less reasonable costs agreed in the policy. Article 36 grants temporary cover from the moment the insurer receives the proposal and the provisional premium, ending when it accepts or declines the risk.

What an employer cannot do while the employee is being treated

Article 37(1) of the Labour Code, consolidated text No. 125/VBHN-VPQH, prohibits the employer from unilaterally terminating the labour contract while the employee is ill, or is being treated or convalescing for an accident or an occupational disease on the order of a competent medical facility, subject to the exception in Article 36(1)(b). Article 37(3) gives the same protection to a pregnant employee, an employee on maternity leave and one raising a child under 12 months.

For employers, that sequence matters: the medical assessment and the return-to-work plan come before any decision about the contract, not after it.

Deadlines and the route out of a dispute

One year from the insured event to file the claim — Article 30(1); the year runs from when the insured or beneficiary learned of the event where they can prove they did not know — Article 30(2).
15 days to pay where the policy fixes no period, from a complete valid file — Article 31(1), with interest on late payment under Article 31(2).
Disputed cause or extent: an independent surveyor under Article 53(2), appointed by the court or the arbitral tribunal if the parties cannot agree, whose conclusion binds both, at the insurer’s cost under Article 53(1).
Article 32: negotiation, then mediation, arbitration or court according to the policy.

What a disability claim file should contain

The policy and the exact definition of disability relied on, with the impairment percentage and any waiting period.
The insurer’s Article 19(2) evidence for any exclusion it applies.
The medical assessment, and a note of whether Article 53(2) should be triggered.
Where the injury happened at work: the accident investigation record, and the entitlement under the occupational scheme kept separate from the policy claim.
Where someone else caused the injury: the claim against them, which Article 38 leaves intact.

Legal basis cited above: Law on Insurance Business No. 08/2022/QH15, Articles 7, 19, 22, 30, 31, 32, 33, 35, 36, 38, 40 and 53; Decree No. 46/2023/ND-CP, Article 5; Labour Code, consolidated text No. 125/VBHN-VPQH, Articles 36 and 37.

If a disability benefit has been refused, or you are an employer working out who pays after a work injury — see Unilaw’s insurance practice, or call +84 912266811 for a first assessment and a fee quote before any work starts.