Vietnamese have not embraced life insurance to the maximum. Various factors have led to this scenario. This course will help determine various factors that influence the purchase of life insurance in Vietnam.
Factors influencing customers’ attitude towards the purchase of life insurance in Vietnam:
Beliefs
The insurance companies in Vietnam are striving to have as many customers as possible. In order to achieve this, the companies have to instill a positive notion to their customers. Mr. Chris Twomey, the CEO ACE, believes that customers should be made aware that life insurance is a great investment product. On the contrary, Vietnamese consumers are more focused on investment returns and hardly think about insurance protection or risk. Many have since ignored the existence of life insurance and this is one of the major factors hindering the growth of this industry. (Business Time, 2010)
Feelings/emotions
The insurance companies in Vietnam have an obligation of making all their clients feel secure. This is however not the notion Vietnamese have on insurance. Most of them only think of life insurance when they are already having a family. The reason for this is because it is only during such times that they feel they should provide some extent of financial protection to their families. As a result of this, it is upon the insurance companies to alter this notion by initiating strategies that would see more people purchasing life insurance. (Business Time, 2010)
Intensions
Insurance companies in Vietnam intend to create a secure society. Brokers and insurance agents play an important role in selling the policies of these insurance companies. These brokers face difficulty in convincing the citizens to subscribe to this service because most of them have the tendency of ignoring risks and only realize their existence when they strike. Insurance companies should inculcate the dangers associated with ignoring insurance to Vietnamese.
Very few Vietnam people have a positive attitude towards life insurance. Others have since argued that purchasing life insurance is a provocation to fate and it may lead to an untimely death of an individual. Some non-users have also seen life insurance as a less important investment because of the few incidences of extreme medical cases that need the intervention of insurance companies. It is only after the demise of a breadwinner that the rest of the family members recognize the importance of life insurance.
Barriers to the purchase of life insurance
The most conspicuous factor that discourage the purchase of life insurance is poverty. Many dwellers find premiums for life insurance very costly for them. A part from that, only a fraction of the country’s population is well informed about life insurance. As a result, there are still a number of potential buyers who are still ignorant of the existence of life insurance. Another important thing to note is the complexity of insurance product and services.
Some insurance agents have also contributed to the low customer influx. This is because they do not present themselves as good businessmen having a product that potential clients would be interested in. The confidence clients have on life insurance has also been eroded by the fact that there are no touting benefits provided in the policy. This has to change in order for Vietnamese to have confidence on insurance companies yet again.
Conclusion
It is imperative that people insure their lives as a security to their next of kin. Vietnam has a good percentage of its people insuring their lives and those of their immediate families. This is an initiative that has gone against the wave of poverty that is relatively strong in the country.
References
Business Time (2010), Newcomers eye life insurance market. Available at: http://businesstimes.com.vn/newcomers-eye-life-insurance-mark
