Why Do Expatriates In Vietnam Need Life Insurance?
Life insurance is one of the foundations of a comprehensive financial plan. If you think you can do without it, read on and let us convince you otherwise.
Life insurance provides financial protection for your family in case of your untimely death. In Vietnam, life insurance is a healthcare system that is a critical life aspect of expats living in the country. It can be a crucial part of planning for both short-term and long-term needs. Life insurance may also offer unique benefits not available through other financial strategies accessible by Vietnam expats.
Vietnam is one of the cheapest countries in Southeast Asia to live in, but it’s still not free. However, several types of insurances, such as travel insurance and health insurance, allow an individual to live more comfortably. Life Insurance can help expats build up their savings account while working in Vietnam, provide them with financial security after returning home, or take risks that they otherwise wouldn’t have been able to handle without life insurance. It is essential if you have dependents who rely on your income for their livelihood.
What is Health Insurance, And How Does it Work?
Health insurance is a program or system that helps you pay for the medical expenses of yourself and your family. Many employers in Vietnam provide it at no cost to their workers as part of their employee benefits package. However, if you are not offered health insurance through your employment, you can purchase it independently.
Health insurance can protect you from the high cost of treatment, admissions in hospitals and surgery. Healthcare providers are legally required to care for and treat Vietnamese patients who cannot pay for their services. Health insurance helps cover some or most of the cost of your medical treatment, depending on the type of plan you purchase.
Financial planning: Building and Protecting Wealth
Financial planning involves creating wealth to fulfil your life goals, which include saving enough for a comfortable retirement, buying a home and funding education fees for your children. However, it is equally important that you protect your wealth by safeguarding you and your family against the potentially damaging financial impact of unforeseen life events. Financial planning is an essential part of living a fulfilled life and one that should not be ignored. It allows Vietnam expats to achieve the success they desire financially with the help of plans such as health or travel insurance.
The first step in any financial or health plan is to create personal objectives. These can be done by identifying what the most critical goals in your life are. It is recommended to be realistic when setting out goals. In addition, they must be measurable so that it becomes more straightforward for you to track your progress over time. Financial planning also requires you to review your current spending habits, which allows you to identify areas where your money is wasted.
How do Insurance Companies Benefit Expats in Vietnam?
Expats in Vietnam are always at risk of injuries, accidents, and property loss due to not being knowledgeable of their surroundings or not being accustomed to Vietnamese customs. Health Insurance is one way for expats working in the country to have the proper medical care if an accident occurs.
This type of insurance can cover costs such as injuries incurred by motor vehicle accidents, house fires, accommodations during extended hospital stays due to reconstructive surgery and many others. Health Insurance also covers costs for any pre-existing medical conditions you may have before you arrive in Vietnam.
Why Is Life Insurance Important for Expats in Vietnam?
An effective life insurance plan in Vietnam provides vital protection for families of expats in the event of the death of their loved ones. While preparing for an untimely death is not ideal, consider for a moment what would happen if you were to meet an unexpected end.
Would your family be able to cover costs for rent or mortgage? Will they be able to pay for the bills, including healthcare and school fees? Would they be forced to make significant life changes such as moving homes or changing schools because of the sudden loss of income? Would they be left with debts to pay off?
If the answers to those questions are not the ones you want them to be, then life insurance is one of the best solutions to the financial problem you are left with and ensures you have a lengthy life expectancy. It will also allow your family to become secure under an adequate insurance policy in the event of your untimely death.
What Are The Three Main Benefits of Life Insurance?
Under a health insurance plan, if expats in Vietnam were to pass away suddenly, their families would receive a lump sum as a death benefit which acts as a financial cushion to replace the sudden loss of income caused by their demise. This insurance offers three significant benefits to Vietnam expats:
1. You can use it to pay off debt
Nobody wants to burden their loved ones with a mountain of debt, especially not expats. That’s why it is recommended to purchase term life insurance to cover all potential debts such as mortgage payments and home loans. Then, if expats were to die over the term of their debt, insurance companies would pay off the amount owed, leaving their families debt-free.
2. It prevents lifestyle downgrade
It is not rare for families who lose a breadwinner to find their lives thrown into chaos because there is no longer enough money to pay for all their necessities. This situation can have drastic consequences, such as rapidly downsizing a home or even moving back to their home country as they have no safety net overseas. In addition, some families may also have regular bills that cover medical-related costs, such as hospital admission, medical care and doctors’ fees.
In Vietnam, taking out a life insurance plan allows you to protect your family against possibilities such as these. In addition, the death benefit of the insurance policy safeguards your standard of living. It ensures that your future lifestyle choices can be based on your wants and needs rather than dictated by financial constraints.
3. It allows you to leave a tax-free financial legacy
Many Vietnam expats use life insurance to pass on a tax-free financial legacy. If they die, their named beneficiaries receive the death benefit immediately without having to wait for the probate process of the insurance plan to be completed. More importantly, the money falls outside your real-estate funds and is therefore not subject to inheritance tax. In Vietnam, life insurance plans are also commonly used as an estate planning tool to provide easily accessible funds to cover a potential inheritance tax bill.
4. It can provide funds for medical care in Vietnam
No matter how healthy an expat is, the unfortunate risk of getting seriously sick in Vietnam is always present. Life insurance can provide financial compensation for medical bills when expats are hospitalized. In addition, under many insurance policies, expats can also receive compensation for any medical expenses, such as doctors fees, that are required after they are discharged from hospitals.
How Much Will Life Insurance Cost?
Are you worried about taking out standard life insurance in Vietnam because of the cost that insurance companies offer? You might not have enough information or knowledge about insurance plans, which explains your hesitancy.
While some insurance companies may seem to have expensive programs, many insurance plans become cheaper for expats in Vietnam in the long term. It is also possible to adapt the type of plan you need to get from an insurance provider based on your budget and their benefits.
Here’s a country-wide case study of an individual living in Vietnam to give expats an idea of just how little it can cost to protect their family based on several health insurance plans:
Charlie is a 35-year-old non-smoker living in Vietnam. He takes out level term life insurance of $100,000 for 25 years. Level term means that the premium and death benefit are both fixed and do not change during the policy’s term.
The cost? US$240.35 per year, which works out at a very affordable $20.03 per month.
It’s even better news if you are female (for a change!). The premium for a woman with the same profile is US$186.30 per year or US$15.53. That’s the equivalent of one inexpensive meal out.
At those prices, can you not afford to have life insurance in Vietnam?
How Much Life Insurance Do You Need in Vietnam?
A life insurance policy is a good form of protection for your family, especially if you are the breadwinner. Insurance protects your loved ones against financial loss brought about by your untimely death. However, life insurance has differing coverage amounts based on how much money or what items are covered. Therefore, it is usually taken out at a young age when premiums are more affordable.
It would be best to determine how much life insurance you need in Vietnam before getting one. You can ask insurance experts to help you choose the right amount. There are also calculators and websites dedicated to giving you custom estimates of the amount of life insurance you will need.
How To Purchase Life Insurance in Vietnam
Infinity’s team in our Vietnam office would love to help you put vital life insurance protection for you and your family. Our team has a wealth of experience in matching policies to requirements and explaining the terms, conditions and small print in a contract to give you peace of mind that you have the right plan to protect the future wellbeing of your family in Vietnam with health insurance.
In addition, Infinity has partnerships with all of the major global health insurance providers but are tied to none. As a result, we offer many choices to find the very best health insurance for you in Vietnam at the best price.
Contact us today at vietnam@infinitysolutions.com and ensure your family is protected, no matter what life throws your way.
A leading provider of expat financial services and wealth management services across Asia.
