The domestic life insurance market has been sparked into life by a story that received wide media coverage about a businesswoman who paid an annual premium of VND1.2 billion (US$61,000).

The policy was reported to cover her for VND39 billion ($2 million).

The story is clear evidence that the Vietnamese attitude towards life insurance is changing.

Instead of purchasing life insurance to support friends and family in the industry, Vietnamese people are now looking at the actual benefits of taking out a policy and many of them are willing to part with large sums of money for the privilege.

"In recent years, my company has sold more and more policies," said Lam Hai Tuan, General Director of ACE Life Viet Nam, one of the country's leading life insurance provider.

Tuan said that up to the end of August, his company had sold nearly 8,400 policies with premiums from VND1 billion ($51,000) each.

"We currently have 15 policies that provide cover of over VND10 billion [$510,000], the largest of which is worth VND50 billion [$2.5 million]," Tuan added.

Other companies such as AIA Viet Nam, Korea Life and Dai-ichi Viet Nam have also witnessed an increase in customers.

The Association of Vietnamese Insurers reported that the market had grown in the first half of the year.

"Up to the end of H1, more than 4 million policies had been taken out, worth VND323.6 billion, an increase of 33 per cent over the same period last year," said head of the life insurance division under the association Nguyen Viet Hai.

Better economic conditions were cited as the main reason.

"Living conditions have improved and demand has increased for services such as healthcare and life insurance," said Hai.

Hai added that many people were planning for the future.

"This happens in many countries, not just in Viet Nam," he said.

Agreeing with Hai, Tuan said, "Vietnamese people now realise that life insurance is a means of planning for the future and providing financial protection for their families."

According to an association report, Vietnamese life insurance has witnessed high growth this year, but still lags behind other countries in terms of value and the number of insurance companies. 

Source: VNS