Microinsurance products protect against life and health risks with a term of no more than 5 years

The Government has just issued Decree No. 21/2023/ND-CP dated May 5, 2023 regulating microinsurance, which stipulates that organizations providing microinsurance include: Non-life insurance enterprises, life insurance enterprises, health insurance enterprises (insurance enterprises), branches of foreign non-life insurance enterprises established and operating in Vietnam;

Mutual organization providing microinsurance established and operating in Vietnam.

Micro insurance products protect against health risks with a term not exceeding 5 years image 1 — Life insurance companies are allowed to provide micro-insurance products to protect against life and health risks with a term of no more than 5 years. Illustrative photo

Notably, for micro-insurance products deployed by insurance enterprises and branches of foreign non-life insurance enterprises, the Decree stipulates that insurance enterprises and branches of foreign non-life insurance enterprises deploying micro-insurance products must comply with the provisions of the Law on Insurance Business and documents guiding the implementation of the Law on Insurance Business; Articles 3, 4 and 6 of this Decree.

The Decree clearly states that the name of a micro-insurance product deployed by an insurance enterprise or a branch of a foreign non-life insurance enterprise must include the element "Micro-insurance product" to distinguish it from other insurance products of the insurance enterprise or a branch of a foreign non-life insurance enterprise.

Life insurance companies are provided with micro-insurance products to protect against life and health risks with a term of no more than 5 years.

Non-life insurance enterprises and branches of foreign non-life insurance enterprises are allowed to provide: Micro-insurance products protecting against life and health risks with a term of 1 year or less; micro-insurance products protecting against property risks with a term of no more than 5 years.

Health insurance companies are provided with: Microinsurance products that protect against life risks with a term of 1 year or less; microinsurance products that protect against health risks with a term of no more than 5 years.

For microinsurance products deployed by microinsurance mutual organizations, the Decree stipulates that microinsurance mutual organizations may only deploy microinsurance products with a term of 1 year or less to meet the needs of members.

Insurance products include one or more specific benefits as follows :

Health care benefits: Support part or all of the costs of hospitalization and surgery for the insured when the insured is hospitalized or has surgery within the scope of insurance.

Accident insurance benefits: Pay the insurance amount corresponding to the rate of disability due to accident of the insured person as agreed in the micro-insurance contract when the insured person is disabled due to an accident within the scope of insurance.

Death or permanent total disability insurance benefit: Pay the beneficiary the insurance amount as agreed in the microinsurance contract when the insured person dies or suffers permanent total disability within the scope of insurance.

Funeral benefit: Pay an additional funeral allowance as agreed in the microinsurance contract when the death benefit is paid.

Property insurance benefits: Pay insurance compensation according to the agreement in the micro-insurance contract when the insured property is damaged due to causes within the scope of insurance.

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