Current types of insurance and basic distinctions

Insurance is divided into many types of products according to the subject matter insured, the nature of the activity or the mode of participation. However, the easiest way to distinguish different types of insurance is in terms of social and economic aspects. Accordingly, insurance can be divided into two main types: State-run insurance and commercial insurance.

Commercial insurance

There are 3 types of commercial insurance on the market including life insurance, non-life insurance and health insurance as follows:

1. Life insurance

According to the Law on Insurance Business, life insurance is a type of insurance business in case the insured person lives or dies. Life insurance has 7 types of insurance as follows:

Term life insurance is an insurance profession in which the insured lives up to a certain term, under which the insurer must pay the insurance premiums to the beneficiaries, if the insured still lives to the specified term. agreed in the insurance contract.

Term life insurance is an insurance practice for the death of the insured within a certain period, whereby the insurer must pay the insurance money to the beneficiary, if the insured dies within the specified period. agreement in the insurance contract.

Mixed insurance is an insurance business that combines term insurance and term insurance.

Whole life insurance is insurance that covers the death of the insured at any time during his or her life.

Periodic payment insurance is an insurance business in case the insured lives up to a certain term; after that time limit, the insurance enterprise must pay periodic insurance payments to the beneficiaries as agreed in the insurance contract.

life insurance

Retirement insurance is an insurance service in case the insured reaches the specified age and is paid insurance premiums by the insurer as agreed in the insurance contract.

Investment-linked insurance is a life insurance product that combines both risk protection and profitable investment. Currently, life insurance companies are deploying two universal life insurance products and unit-linked insurance products in the investment-linked insurance business.

2. Health insurance

Health insurance is a type of insurance for the insured person’s injury, accident, illness, disease or health care paid for by the insurer as agreed in the insurance contract. . In health insurance, there are three types of insurance:

Personal accident insurance is an insurance product for cases of bodily injury or death due to an accident.

Medical insurance: Commercial health insurance, also known as health insurance of non-life insurance companies, aims to support medical expenses when participants are unfortunately at risk of illness. disability, accident…

Health care insurance is an insurance product that supports treatment costs and benefits participants in case of illness, disease, surgery, accident, maternity…

Health insurance

3. Non-life insurance

Non-life insurance is a type of property insurance, civil liability and other insurance operations that are not part of life insurance. Non-life insurance is divided into the following insurance operations:

Property insurance and damage insurance: Property insurance is an insurance product for property objects including real things, money, papers worth money and property rights.
Insurance of goods transported by land, sea, inland waterway, railway and air.

Aviation insurance: “Aero insurance is insurance specifically for the operation of aircraft and the risks related to the process of transportation by air (including goods and people)”

Motor vehicle insurance is an insurance product for motor vehicles to indemnify the vehicle owner in the event of an unfortunate accident involving people, the vehicle or the goods on the vehicle. In addition to the compulsory insurance, motor vehicle owners and can buy more voluntary products: Insurance for physical damage to vehicles; Accident insurance for drivers, assistants and occupants; Car owner’s insurance for goods transported on the vehicle.

Fire and explosion insurance is a product that compensates for damage that occurs to the insured’s property when there is an unfortunate risk of fire and explosion.

Hull insurance and shipowner’s civil liability: Hull insurance is a compensation product for damage to the hull, machinery and equipment of the ship due to perils of the sea/river caused, or due to unexpected accidents. “Civil liability insurance for shipowners is insurance for risks related to statutory liabilities and expenses that the shipowner, manager, operator, charterer (excluding charterers) voyage) must pay for third party damage caused by the operation of the ship or boat, including damage to people and property.”

Liability insurance is an insurance product for risks related to legal liabilities or the obligation to compensate for damage caused by the insured’s fault to other organizations or individuals.

Credit insurance and financial risks: Credit insurance is an insurance product for loans that help borrowers repay bank loans in the event of an unexpected risk.

Business loss insurance is an insurance business for property risks in the production and business process of an enterprise.

Agricultural insurance is a type of insurance for production objects in the agriculture, forestry and fishery industries, whereby the insurance buyer pays the premium, the insurance enterprise compensates the insured when the occurrence occurs. Insurance events (According to the Decree on Agricultural Insurance).

life-insurance-4

Insurance provided by the State

1. Deposit insurance

According to the Law on Deposit Insurance, Deposit Insurance is a guarantee to return the deposit to the insured of the deposit within the insurance payment limit when the deposit insurance participating organization falls into the state of insolvency. pay deposits to depositors or go bankrupt.

According to the latest Decision 21/2017/QD-TTg of the Prime Minister on the limit of deposit insurance payment, “Insurance amount is paid for all insured deposits in accordance with the provisions of the Law on Deposit Insurance. Deposit insurance (including principal and interest) of an individual at the deposit insurance participating organization is up to 75,000,000 VND (Seventy five million VND).

2. Health insurance

According to the law on health insurance: Health insurance is a form of compulsory insurance applied to the subjects prescribed by the Law on Health Insurance for health care, not for profit purposes provided by the State. implementation organization.

According to the Law amending and supplementing a number of articles of the Law on Health Insurance 2014, the maximum monthly health insurance premium is 6% of the monthly salary or the base salary… depending on the subject. But the State supports from 30% -100% of health insurance premiums for some subjects such as people with meritorious services to the revolution, near-poor households, students…

3. Social insurance

According to the Law on Social Insurance: Social insurance is a guarantee to replace or partially compensate an employee’s income when his/her income is reduced or lost due to illness, maternity, work accident, occupational disease. employment, the end of working age or death, on the basis of contributions to the social insurance fund.

Compulsory social insurance is a type of social insurance organized by the State that employees and employers must participate in. The monthly contribution rate of Vietnamese employees is equal to 8% of the monthly salary/base salary to the retirement and survivorship fund.

Voluntary social insurance is a type of social insurance organized by the State in which participants can choose a payment rate and payment method suitable to their income and the State has a policy to support insurance premiums. society for participants to enjoy retirement and survivorship benefits.

The regimes of compulsory social insurance include: Sickness; Maternity; Labor accidents, occupational diseases; Retire; Death of the dead. The regimes of voluntary social insurance are retirement and survivorship.