Life insurance disputes in Vietnam rarely turn on whether the insured died. They turn on the proposal form, on whose written consent was needed, on a lapsed premium, and on who the beneficiary actually is. The Law on Insurance Business No. 08/2022/QH15 answers each of those with a specific rule, and the rules are more favourable to the family than most claimants assume.
Consent is a condition of validity, not a formality
Where the policyholder takes out life or health cover on the death of another person, Article 39(1) requires that person’s written consent, and that consent must state the sum insured and the beneficiary. A policy signed without it is exposed.
Article 39(2) then bars such a contract altogether for four categories: a minor, unless a parent or guardian consents in writing; a person who has lost civil act capacity; a person with difficulty in cognition and behaviour control; and a person whose civil act capacity is restricted.
For employers and for banks writing credit life cover, this is a file-quality question to fix at inception, not at the claim.
Rescission for non-disclosure requires deliberate intent
The standard refusal is that the proposal form was wrong. Article 22(2) permits the insurer to rescind only where the policyholder deliberately provided incomplete or false information, and did so in order to obtain payment. Negligence, a form completed by an agent, a question the insured did not understand — none of those satisfy the test as drafted.
Article 22(3) runs in reverse: where the insurer deliberately failed to provide information or gave false information in order to get the contract signed, the policyholder may rescind, recover the premium paid, and claim damages.
One argument to test carefully: that the insurer arranged a medical examination before accepting the risk and so must live with what it found. Most Vietnamese life policies answer that in the wording, by stating that an examination does not replace the policyholder’s duty of honest disclosure. Whether that defeats the argument depends on the policy in front of you and on whether the insurer can discharge its own duty under Article 19(2) — so read the clause before relying on the examination.
The exclusion has to be proved
Article 19(2) requires the insurer to set exclusions out clearly, explain them fully, and hold evidence that the policyholder was given that explanation and understood it at contracting. Ask for that evidence in writing before arguing about the medical history. Article 19(3) also removes any late-notification exclusion where force majeure or an objective obstacle caused the delay.
Twenty-one days, and cover before the policy issues
Article 35: on a contract with a term over one year, the policyholder has 21 days from receiving the policy to refuse to continue, in which case the contract is cancelled and the premium refunded less reasonable costs agreed in the policy.
Article 36 covers the gap at the other end. The insurer grants temporary cover from the moment it receives the proposal and the provisional premium; the term, sum insured and conditions of that temporary cover are as agreed, and it ends when the insurer accepts or declines the risk.
A missed premium is not the end of the policy
Article 37(2) gives a 60-day grace period where the premium is payable in instalments and the policyholder has paid one or more but cannot pay the next. Article 37(3) allows the parties to agree to reinstate a policy unilaterally terminated under Article 26(1) within two years of termination, once the outstanding premium is paid.
Article 37(4) sets two limits on the insurer, and they are worth knowing: it may not deduct the premium from the surrender value without the policyholder’s consent, and it may not sue the policyholder for unpaid premium. That rule does not apply to group policies.
When a life or health policy pays nothing
Article 40(1): suicide within two years of the first premium or of reinstatement; death caused by the deliberate act of the policyholder or a beneficiary; permanent disability caused by the deliberate act of the insured, the policyholder or a beneficiary; death by execution of a death sentence; and other cases agreed in the policy.
Article 40(2) preserves the entitlement of the innocent beneficiaries where one of several deliberately caused the death or permanent disability. Article 40(3) requires the insurer, even in the Article 40(1) cases, to return the surrender value or the premiums paid less reasonable costs, and where the policyholder has died that sum passes under the law on inheritance.
The beneficiary, and the default nobody plans for
Article 41(1): the policyholder may designate the beneficiary, except under a group policy; where the policyholder is not the insured, designation needs the insured’s written consent, and the legal representative’s consent where the insured is a minor or lacks or has restricted capacity.
Article 41(2) is the default that decides many family disputes: where the order or the proportions between several beneficiaries are not stated, all of them share equally.
Article 41(3): a change of beneficiary needs the insured’s written consent and written notice to the insurer, and the insurer must record it on the policy or on an attached document. A change communicated only to an agent is not a change.
Group policies work differently
Article 42(2) requires the insured group to be one that already existed for a reason other than buying insurance. Article 42(4) gives the right to name a beneficiary for death to the insured person, not the policyholder. Article 42(5) lets the contract be amended where a member leaves the group or the premium for an insured is unpaid. And Article 42(6) requires the contract to state the conditions of participation and the conditions and procedure for converting into an individual policy — the clause employees need when they leave.
Where a third party caused the death or injury
Article 38: the insurer must pay under the policy and has no right of recourse against the third party who caused the death, injury or illness, and that third party remains liable to the insured under the law. A family can therefore take the policy proceeds and still pursue the person at fault.
Deadlines and the route out
- One year from the insured event to file the claim — Article 30(1); the year runs from the date 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); interest on late payment — Article 31(2).
- Disputed cause or extent: an independent surveyor under Article 53(2), binding on both parties, at the insurer’s cost under Article 53(1).
- Article 32: negotiation, then mediation, arbitration or court according to the policy.
Legal basis cited above: Law on Insurance Business No. 08/2022/QH15, Articles 19, 22, 26, 30, 31, 32, 33, 35, 36, 37, 38, 39, 40, 41, 42 and 53.
If a life policy has been rescinded or a death benefit refused — see Unilaw’s insurance practice, or call +84 912266811 for a first assessment and a fee quote before any work starts.
Before instructing a Vietnamese law firm, check the certificate, the contracting entity and the account the money goes to.
If the insurer has refused, read what the courts require before an insurance claim denial in Vietnam can stand.
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