Just 10 years ago, anyone diagnosed with human immunodeficiency virus (HIV) would have struggled to obtain life assurance. Today, thanks to advances in medicine and a greater understanding of the risks, most insurers are happy to provide cover to those individuals.
A quick look at the nature of the virus and its history explains why insurers’ attitude to covering people with HIV has changed. It is a virus that attacks the immune system and weakens the body’s ability to fight diseases and infections. Left untreated, it can develop into acquired immune deficiency syndrome (Aids), where the body becomes unable to fight life-threatening infections.
When the first cases of Aids were identified in the US in 1981, many predicted it would become an epidemic with restrictions placed on everything from travel to insurance.
Thankfully, those fears also led to extensive research into the illness, resulting in the identification of the HIV virus in 1984 and the first treatment for HIV, AZT, a few years later.
As the effects of AZT proved to be unpredictable, combination drug therapies were developed in the 1990s, with these becoming increasingly effective at treating HIV.
Today, although there is still no cure for HIV, treatment lowers the amount of the virus in the blood to undetectable levels, thereby stopping it from damaging the immune system and preventing it from being passed on to other people.
Life expectancy
In addition and, importantly from an insurance angle, someone with HIV who is on treatment and responding to it can expect the virus to have no effect on their life expectancy. Reaching this point has enabled the life assurance industry to take a much more relaxed approach to offering cover to this group of people.
The first mainstream insurer into this market was Vitality Life, then under the guise of PruProtect, which started underwriting life assurance for people with HIV in 2009. Policies had a maximum term of 10 years and individuals could take up to £250,000 of cover.
Deepak Jobanputra, deputy chief executive of Vitality Life, says that as his firm has gained more experience it has been able to increase these limits. He says, “The risks were more unknown when we first came into the market, but today we are able to extend cover up to £500,000 over a 20-year term, subject to age limits of 25 to 60, and providing the applicant is taking treatment for their HIV.”
Growing market
The confidence that Vitality Life has gained over the past seven years has been mirrored across the industry.
In a 2015 survey of the top 11 insurance providers who distribute their products through independent advisers, Unusual Risks Mortgage & Insurance Services found that 72 per cent of them now offer some form of HIV life cover. This is up from 50 per cent when the firm started conducting this survey in 2011.
Chris Morgan, lead financial adviser at Unusual Risks Mortgage & Insurance Services, says, “The insurers’ attitudes to providing cover does vary. Some will only offer a maximum of £250,000 of cover, while others are more comfortable with higher sums assured. I have arranged £2m of cover for one of my clients.”
The key to gaining any form of cover is the individual’s health status. As well as being on HIV treatment, insurers will want to see a reasonable CD4 count, typically above 400, and an undetectable viral load.
The CD4 count is a laboratory test to show how well the person’s immune system is working. These readings indicate that the virus is being controlled and the person’s immune system is not being damaged.
Specialist insurers are also developing new products in this area. For example, later this year Pulse Insurance is launching a product that can be taken out without any underwriting. This provides a blanket £50,000 of cover with premiums starting at £30 a month depending on circumstances.
Raising awareness
Given the relatively short time it has taken for the insurance industry to relax its attitude to offering life cover to people with HIV, there is a need to highlight this to potential customers.
To do this, and provide more information about cover for this group of people, the Association of British Insurers (ABI) published a guide, HIV and Life Insurance, in July.
The guide was written with input from several organisations including Terrence Higgins Trust, National Aids Trust and Unusual Risks Mortgage & Insurance Services. It includes information on how to buy life cover, how insurers will treat existing policies if someone is diagnosed with HIV, and HIV testing as part of medical screening.
Charlie Campbell, policy adviser for protection and health at ABI, says, “We are keen to address some of the misconceptions people have about life insurance for people with HIV. Now that insurers have a better understanding of the risks, it can be treated just like any other pre-existing condition, but many people still think they will not be able to get any cover.”
To support this, Unusual Risks found that one in three of those surveyed did not believe life insurance was available to people with HIV.
Cancellation misconception
The ABI guide also highlights another significant misconception – that life assurance becomes invalid once someone is diagnosed with HIV. According to research by Unusual Risks, 22 per cent of policyholders cancel a life insurance policy following an HIV diagnosis.
Alex Sparrowhawk, membership and involvement officer at the Terrence Higgins Trust and contributor to the ABI guide, believes this is down to stigma as well as misunderstanding.
Mr Sparrowhawk says, “There are still stigmas surrounding HIV, so we find that when someone is diagnosed with HIV they assume their life insurance will be invalid.
“In some cases they are afraid to ask their insurer so they just cancel their cover.”
In reality, HIV is treated in exactly the same way as any other condition someone might contract after policy inception. There is no need to tell the insurer and certainly no requirement to cancel cover.
Those who cancel their life insurance can find themselves at a disadvantage if they try to take out cover again, as there is no cooling-off period. In addition to an increase in the cost due to their HIV status, any increase in their age could also ramp up the premium.
More protection
Insurers may have relaxed their approach to life assurance for people with HIV, but other forms of protection – including critical illness insurance and income protection – still make them jittery. Mainstream insurers do not offer either of these to people with HIV.
While it may be more challenging to offer critical illness insurance due to difficulties determining what is and is not HIV-related, Mr Morgan believes there is much more room for manoeuvre with income protection. His research shows that, on average, people with HIV tend to have a much better attendance record than their peers.
For example, in a survey of 100 people with HIV, he found that 89 per cent had taken fewer than seven days sick in the previous year, with 74 per cent taking less than the national average of four days.
He says, “Income protection is underwritten on someone’s ability to work, so these findings should give insurers more confidence about offering cover to people with HIV. They could also use their claims experience from group policies to build a case for individual protection products.”
Although more needs to be done to ensure people with HIV have access to protection, the steps the insurance industry has taken over the past seven years are encouraging. Building on these and dispelling more myths surrounding HIV, is essential.
