FAQ

Question:

1. What's life insurance policy?

Answer:

Life insurance policy is a contract between individual or organization and Insurance Company to protect Insured during insurance term.

When Insurance event happened, the Insurance Company bases on Terms and Conditions of insurance policy to pay benefit to Beneficiary (ies) correspond to articles in Terms and Conditions.

Insurance types and insurance products of Cathay Life are announced on company's website at "introduction of Life insurance".

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Question:

2. What's temporary insurance?

Answer:

Temporary insurance is effective from the date when the Policy Owner submits the application form and pays full the first premium to Company, and ends on one of the following dates, depending on what comes first:

  • The date when Insurance Policy is issued; or
  • The date when Declination Letter is issued (based on Post Office stamp, if sent by post); or
  • The date when the Policy Owner asks to cancel application form in writing; or
  • After sixty (60) days from the effective date of Temporary Insurance.

The Company will temporarily insure the Insured for the less minimum amount of two hundred (200) million VND and the Sum Assured of basic insurance as specified in application form if the Insured is died by an accident during the temporary insurance term, no matter how many Application form the Insured has. If the first premium is exceeded 200.000.000 VND, the Company will pay the Death Benefit with the amount equal to the first premium.

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Question:

3. When Policy Owner faces financial difficulty to pay full premium and keep policy (ies) in forced, does Cathay Life provide any helps to Policy Owner?

Answer:

In these cases, Cathay life provides to Policy Owner some choices to keep policy (ies) in forced:

  • Reduced Paid-Up Insurance:
    When the Policy Owner has paid sufficient premiums to accumulate the Surrender Value, the Policy Owner may apply to the Company to use the amount of then-current Surrender Value as a single premium to change this Policy into a reduced paid-up insurance of the same type as this Policy, with a Sum Assured as shown in the attached schedule. When the Policy Owner changes this Policy into a reduced paid-up insurance, no further premium payments will be required and this Policy will remain in effect and the change cannot be reversed. The insurance benefit payment conditions will be the same as in the original policy provided that the Sum Assured/Annual Sum Assured will be the amount under the reduced paid-up insurance.
  • Reduce Sum Assured:
    While this Policy is still effective, the Policy Owner may apply to reduce the Sum Assured, provided that the Sum Assured after reduction may not be lower than the minimum coverage determined by the Company (the minimum coverage will be informed from the customer service center).
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Question:

4. If the Policy Owner wants to surrender policy (ies) before maturity date, what does Policy Owner get at this situation?

Answer:

When customer buys insurance policy, they simultaneously buy protection for future plans for themselves and their relatives. The Company always wants to share with customer at the most difficult period during policy term. However, the Company also respects customer's surrender policy decision by any personal causes.

In this case, The Policy Owner can surrender this Policy for its Surrender Value. Surrendering of this Policy will take effect from the time the Company receives a written notice of surrender from the Policy Owner. Should the Policy Owner surrender the Policy, the Company will pay the Policy Owner the then-current Surrender Value (if any) after deducting any outstanding Policy Loan balance and Automatic Premium Loan balance (all with interest accrued at rates and in a manner determined by the Company in compliance with relevant regulations set forth by the State Bank of Vietnam).

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Question:

5. If Policy Owner fails to pay premium timely and fully as agreement, what happens to insurance policy?

Answer:

If the Policy Owner fails to pay a premium timely and fully as agreement, the Company allows a grace period of sixty (60) days from the Premium Due Date.

Before the end of the grace period, the Policy Owner may state, either in the application or in a written declaration to require the Automatic Premium Loan, the Company shall use the then-current Surrender Value under this Policy (or, where a Policy Loan has been taken out, from the remaining Surrender Value after deduction of the Policy Loan's principal and accrued interest, if any) to make an Automatic Premium Loan to cover the premium and interest due from the Policy, in order to allow this Policy to remain in effect.

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Question:

6. What is interest feedback benefit?

Answer:

At the end of each Policy Year during Premium Paying Period, Interest Feedback, an amount equal to the interest accrued on the mid-year Surrender Value at the excess, if any, of the 12-month Average Declared interest rates over the pricing interest rate of this Policy, can be requested by the Policy Owner. In case the Policy Owner does not request for a payment of Interest Feedback, the amount will be accumulated and accrued at the Declared Interest Rate monthly until the termination date of the Policy.

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Question:

7. If the customers face to financial difficulty, can they make loan from insurance policy?

Answer:

When the Policy Owner has paid sufficient premiums to accumulate the Surrender Value, the Policy Owner may apply in writing to the Company for a Policy Loan which the amount shall not exceed eighty five percent (85%) of the Surrender Value at that point of time.

The Policy Owner can refund the received Policy Loan at any time. The Company may deduct the Policy Loan from any amount which the Company must pay under the insurance policy.

Interest for the Policy Loan will be accrued at rates and in a manner to be determined by the Company in compliance with relevant regulations set forth by the State Bank of Vietnam. When the Policy Loan matures, the Policy Owner shall repay the loan principal along with its accrued interest to the Company. Interest not paid when it is due shall be added to the principal of the Policy Loan and accrues interest at the same rate and in the same manner.

When the total amount of Policy Loan and Automatic Premium Loan along with their accrued interest equals or exceeds the then-current Surrender Value, the effect of this Policy will be suspended.

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Question:

8. Why is the surrender value often less than total paid premium in the first policy years?

Answer:

When customer buy life insurance policy, the premium customer paid to Company used to pay net premium ( net premium is calculated basing on mortality, gender and age of Insured to pay benefits which Company committed in Terms and Conditions) and loading expense during policy term.

In the first policy years, expenses concern issuing and serving policy as underwriting expense, commission expense, printing expense ... is higher than expenses in next policy years. However, premium customer paid is distributed normally during policy term. Meanwhile, the serving expense in first policy years is much higher than total premium customer paid. Therefore, in the first 2 policy years, the insurance policies don't have surrender value and in the next policy years, the surrender value is less than the total paid premium. Meanwhile, if customer(s) surrenders policy (ies) in the first policy years, both customer and Company are disadvantaged because both of them don't still get enough for paid expense.

According to article 35 of Insurance Law, if Policy Owner doesn't still pay enough premium for the first 2 policy year, the Insurance Company has the right to postpone policy and Policy Owner doesn't have the right to request company pay.

The main purpose of customer buying insurance policy that wants to get protection against suddenly risks. When policy is issued, the Insured gets protection equal to the Sum Assured of insurance policy if and only if the customer notifies correct necessary information in application form.

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Question:

9. The surrender value is less than total paid premium, why should customer buy insurance instead of depositing their money in the bank?

Answer:

The main purpose of customers buying insurance policy that want to get protection for themselves or relative against suddenly risks. Insured gets protection equal to the Sum Assured of insurance policy if the customer notifies correct necessary information in application form. Meanwhile, the Company will pay the sum assured to beneficiary if the Insured becomes died and TPD despite Policy Owner only pays the first premium if and only if the customer notifies correct necessary information in application form. However, any risks or accidents suffer to customer; the bank is only responsible to customer's deposit and the amount of customers at maturity depending on their deposits on the bank.

Therefore, insurance has both high protection and high strict saving. If the risk happens, that's insurance. Otherwise, that's customer's saving. Hence, the big difference between insurance and deposit in bank is protection for the Insured.

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