HCM CITY — Major life insurers in Việt Nam are actively diversifying their product offerings to meet growing demand from customers who seek a blend of protection and investment when purchasing life insurance.

Investment-linked policies (ILPs) have become the choice of many insurers in the market, such as FWD, Manulife, Bảo Việt, Dai-ichi, and Prudential, providing a comprehensive insurance solution that caters to both protection needs and wealth accumulation goals.

During a recent seminar titled “Investment from Protection” hosted by FWD in HCM City, Ngô Trung Dũng, deputy general secretary of the Insurance Association of Vietnam (IAV), highlighted the evolution of life insurance over the years. 

Originally designed to protect against the risk of death, life insurance has evolved to offer additional benefits such as disability coverage, medical care, and opportunities for asset growth and investment, he said, affirming that the first ILPs were launched in Việt Nam in 2008.

To date, while ILPs have seen significant development in neighbouring countries like Singapore, the Philippines, and Malaysia, where their scale ranges from 45 per cent to 77 per cent, the adoption in Việt Nam stands at only 10 per cent. 

This indicates a potential growth opportunity in the market, especially as many customers in Việt Nam are increasingly seeking insurance solutions that not only provide protection but also help enhance their assets.

According to a report from FWD presented at the seminar, nearly 20 per cent of insurance buyers in Việt Nam express a desire to grow their assets in addition to seeking protection. 

Đậu Tiến Dũng, deputy chief strategy officer of FWD, pointed out that many Vietnamese customers prioritise asset growth, savings for the future, and career planning alongside the core protection benefits when choosing insurance products.

In addition to customer demands and potential development opportunity, the stock market is playing a significant role in driving the development of ILPs in Việt Nam. 

With the positive changes in the Vietnamese stock market confirmed by FTSE Russell, there is a growing expectation that the stock market will become a valuable investment and asset avenue for Vietnamese customers in the long term.

Drawing from his company's experience, Dũng highlighted the launch of FWD’s new product, “FWD Embracing Investment,” which aligns with the new Law on Insurance Business and addresses customers' core needs of financial protection and long-term asset growth.

Phương Tiến Minh, chief executive officer of FWD Vietnam, shared: “The launch of ‘FWD Embracing Investment’ reflects our consistent strategy to diversify our product portfolio, delivering solutions that better match customers’ varying needs, goals, and risk appetites. Financial protection remains the core foundation of life insurance, and this product adds a complementary option that combines protection and investment, helping customers take a more proactive approach to long‑term financial planning.”

Alongside the product launch, FWD Vietnam has also upgraded its sales tools and processes to better support agents in providing needs‑based advice, appropriate levels of protection, and suitable risk profiling, guided by clear criteria and standards.

 

 

To ensure the effectiveness of ILPs, adherence to core principles of protection and transparency is essential. 

Trung Dũng from IAV emphasised that the misunderstanding between ILPs and pure investment products arises from three main reasons, including the hybrid nature of ILPs, incomplete advisory practices, and investor psychology focusing solely on profits without considering market fluctuations.

In order to prevent "misselling," Dũng stressed the importance of following three principles: suitability before sale, transparency in fee and investment information, and enhanced supervision of advisory processes through standards and technology like recording.

Dương Kim Anh, director of the Investment Department at Vietcombank Fund Management Company, pointed out that due to the long-term nature of life insurance, it may not be suitable for short-term goals. Therefore, investment products combined with insurance should be tailored to align with the holding period and risk tolerance of customers. — VNS