Vietnamese people are paying increasing attention to financial planning, family protection and preparation for long-term risks, with up to 89% of respondents viewing life insurance as “highly important in daily life”, according to the Insurance Association of Vietnam (IAV).
However, life insurance is still largely perceived as a supplementary financial safeguard rather than a core risk-management tool or a long-term investment solution, the association said in its Public Opinion and Community Engagement Policy Research Quantitative Report.
The findings were based on a survey conducted by market research firm IFM Research, covering 1,265 respondents in both urban and rural areas across Hanoi, Ho Chi Minh City, Hai Phong, Danang and Can Tho.
Strong recognition of life insurance as an essential need
89% of respondents say life insurance is highly important in daily life. The figure reached 91% among life insurance owners, 86% among non-life insurance owners, and 91% among life insurance lapsers.
"The findings provide an encouraging signal, confirming that life insurance is increasingly recognized as an important financial solution in people’s lives - not only among existing customers but also among those who have not yet purchased coverage," IAV stated in a release on Thursday.
At the same time, the study recorded relatively positive levels of individual understanding of life insurance. 58% rated themselves as having a good understanding of life insurance.
The proportion was broadly consistent across age groups: 57% among the group aged 22-29 years old, 59% among the group aged 30-40 years old, and 58% among the group above 40 years old.
However, the main reasons why life insurance is considered necessary were tied to fundamental household needs. 57% said life insurance helps protect against risks, illness, accidents and death, while 45% highlighted its role in maintaining financial stability and support for the family.
In practice, a gap remains between recognizing the value of life insurance and incorporating it proactively into financial planning. Rather than using insurance as a forward-looking risk management tool, most people continue to adopt a defensive financial mindset.
When unexpected events occur, respondents said their first solutions would be to use savings (67%), reduce spending (53%) or seek additional income sources (39%). This suggests that life insurance is still largely perceived as an additional layer of protection rather than a core component of personal financial strategy.
Ralf Matthaes, managing director of IFM Research, said: "Public financial behavior remains primarily defensive. Although demand for and perceptions of life insurance are highly positive, actual ownership remains relatively low. Life insurance is still viewed mainly as supplementary financial protection rather than a core risk-management tool or a long-term investment solution.
"This presents both a challenge and an opportunity for brands to reshape the market through simpler policy wording, greater transparency, higher-quality advisory services and more structured financial education".
The study also showed that the main motivations to buy life insurance are risk protection, medical expense coverage and safe savings, while investment considerations remain less important.
Among policyholders, the most important decision factors included reasonable fees, reputable companies, products that meet needs, reasonable compensation payout, clear benefits, and fast claims processes. Younger individuals prioritize long-term contract maintenance, while the parent groups emphasize wide coverage scope.
Key barriers to life insurance participation included long payment timeline, prioritizing other investments, financial difficulties, and a lack of perceived need. Among respondents aged 22-29, the lack of suitable consultation emerged as the biggest obstacle.
Notably, the study found that financial pressure is the leading reason people struggle to maintain long-term contracts. The current average premium stands at around VND1.8 million ($68.37 million) per month (VND22 million or $836 per year), which remains a significant hurdle when incomes fluctuate or when consumers do not fully understand the value received relative to expectations.
Long-term planning capability needs strengthening
The study found that financial behavior varies significantly across different life stages. The under 30 group tends to prioritize purchasing major assets, maintaining spending stability and supporting parents. The 30-40 group focuses more on saving for children and long-term investment, while the 41+ group prioritizes retirement savings.
Across all age groups, however, a defensive financial mindset remains dominant, with people prioritizing building emergency reserves and ensuring family security, while investment continues to play a secondary role.
Financial planning capability remains relatively underdeveloped. The study found that 83% of respondents already have financial plans, with 46% maintaining both short-term and long-term goals. However, most respondents only began thinking seriously about financial planning in recent years, particularly following the Covid-19 pandemic, and their plans are reviewed infrequently.
“This indicates that people have started to develop financial planning habits, but the level of financial maturity remains limited. This underscores the need for stronger public communication and education on long-term financial planning and the role of life insurance within a broader preparedness strategy,” the research report noted.
Notably, people over 30 years old tend to plan their finances more than other groups. They, along with the Have kid(s) group, also started planning earlier and adjusting more frequently, demonstrating a higher level of financial initiative and discipline.
The report also identified clear geographic differences in financial behavior. Residents in first-tier cities recorded a higher rate of financial planning, reflecting greater initiative and awareness in managing personal finances.
However, respondents in southern cities showed a stronger tendency toward long-term planning and earlier preparation, suggesting a more future-oriented financial outlook and stronger saving habits.
Meanwhile, respondents in northern cities reported higher rates of short-term financial planning only, indicating a more pragmatic approach focused on managing daily cash flow. By contrast, rural communities in central Vietnam recorded the highest proportion of people without financial plans, highlighting more limited financial planning habits.
Life insurance market becoming increasingly mature
According to IFM Research, consumers consider several factors essential for an insurance brand to be viewed as trustworthy: clear information and policy terms, strong financial capability and professional advisors who can explain products in an accessible way.
In the 22-29 years old age group, recommendations from friends and family played a more important role, reflecting reliance on trusted sources when time or financial knowledge is limited.
By contrast, respondents with children paid particular attention to the financial strength of insurers, aligning with their desire for long-term security for their families.
The research also showed that life insurance is especially common among people aged over 30 - a life stage when many begin taking on greater financial responsibilities related to family, children, parents and long-term goals.
Notably, 80% of those who do not yet own life insurance plan to buy it within the next 12 months. The figure suggests that the market still holds substantial untapped demand, but its broader significance lies in how consumers are approaching insurance. People are not turning away from life insurance. Instead, they are researching, comparing and evaluating options more carefully before making a long-term commitment.
Nguyen Phong Cam, deputy secretary general of the IAV, said: “This indicates that the market is shifting from emotional decision-making toward choices based on actual needs. That is a sign of a more mature market. As customers ask more informed questions, insurers have greater opportunities to provide more tailored advice, design more suitable solutions and build longer-term relationships with consumers”.
According to IFM Research, the findings suggest that life insurance should continue to be positioned as a proactive financial protection tool, supported by transparent benefits and stronger post-sales services to build consumer confidence and encourage continued engagement with insurance products.
Recent risk data underscores the urgency. Statistics from Vietnam’s Ministry of Health show that, on average, around 1.1 million injury cases receive examination and treatment at healthcare facilities each year, while more than 30,000 people die annually from injuries. Road traffic accidents, drowning and workplace accidents remain among the leading causes of injury-related deaths.
“When properly understood, appropriately selected and sustainably maintained, life insurance is more than a financial contract. It is a way for individuals to demonstrate responsibility toward themselves, their families and the future. This is also the lasting value that the life insurance industry can contribute to society: helping more Vietnamese families live more proactively, confidently and resiliently in the face of life’s uncertainties,” Cam added.
This is the first time in more than 30 years of the Vietnamese life insurance industry's development that the sector has joined forces to conduct an independent study on public awareness and behavior in this field.
"Publishing this research not only provides a comprehensive picture of awareness and perceptions of the importance of life insurance in society, but also serves as an important basis for regulators, insurers and the broader insurance industry to develop more suitable solutions to better serve people in the years ahead," said Nguyen Phong Cam, deputy secretary general of the IAV.
According to the association, the report was released at a time when the life insurance industry continues to adjust its product portfolio to comply with new regulations and better respond to changing consumer needs at different stages of life.
To ensure a high degree of accuracy and provide insurers with a clearer understanding of customer financial profiles, as well as support policymakers in promoting insurance as a financial protection mechanism, the IAV worked closely with IFM Research throughout 2025 to conduct the survey.
The survey covered 1,265 respondents, with the sample designed to reflect a broad range of audiences relevant to the life insurance market - from younger adults beginning to establish financial plans, to families focusing on savings accumulation and health protection, and to middle-aged and older groups increasingly concerned with retirement, children’s future and broader family financial protection.
About genders, the survey sample was relatively balanced by gender, with men accounting for 45% (570 respondents) and women accounting for 55% (695 respondents). This distribution enabled the study to capture perspectives from both men and women on financial planning, insurance access and decisions related to purchasing life insurance.
The survey focused on adults aged 22 and above, covering multiple stages across the financial life cycle. This structure allowed the research team to compare protection needs, wealth accumulation, healthcare priorities and retirement preparedness across different stages of life.
All respondents belonged to the income group earning VND20 million ($760) per month or above. This group was selected because of its greater ability to consider commercial insurance products and long-term financial solutions.
About life insurance ownership, the sample was divided almost evenly between ownership groups. Life insurance owners accounted for 51%, while non-life insurance owners made up the remaining 49%. This structure enabled comparisons between the actual experiences of life insurance owners and the perceptions, expectations and barriers of those who do not yet own life insurance.
