The revised Statement of Best Practice on HIV and Insurance should bring some long-awaited changes to the market. Rachel Gordon reports
The publication of the Association of British Insurers' (ABI) Statement of Best Practice on HIV and Insurance in October 2004, established an industry-wide agreement to stop asking pejorative questions and to treat everyone applying for insurance fairly.
While most life insurers would not admit it, men working as hairdressers, ballet dancers or cabin crew, would, in the past, have prompted many underwriters to assume they were gay, and at a higher risk of contracting - or already having - HIV. It could have meant an automatic request for an HIV test or the application even being rejected.
Controversy
Insurers have been accused of being prejudiced when it comes to underwriting gay men. Others will argue they've had their fingers burnt. Currently, someone with term cover in place can expect a pay out for their beneficiaries if they died of an Aids-related illness.
The issue of providing protection cover for gay men has been fraught with controversy. IFAs such as Chris Morgan of London-based Compass, have campaigned to make insurers take a less bigoted view. He comments, while it is good news that occupation can no longer be used to indicate sexuality, the industry needs to realise gay men are far from homogenous. "HIV-risk is apparent across all spectrums, not just the gay community. It's important we find modern, fair and respectful methods of identifying HIV risk across all groups," he says.
Morgan adds that he has dealt with a number of instances where clients were selected for HIV-testing as a result of their professions, and were charged 100% more than a supposedly 'standard' risk.
Figures from the Health Protection Agency show there are 53,000 adults living with HIV and Aids in the UK, although a quarter of them are as yet unaware they are infected.
HIV affects everyone, and in the developing world, experts are particularly concerned about women, who may be less empowered and more ignorant about their sexual health.
In 2003, the biggest rise in those affected was among heterosexuals, although gay men represent the majority of those with the virus. There were 6,606 new diagnoses in the UK during 2003, 58% were heterosexuals, with gay and bisexual men accounting for 26%. The increase in HIV positive diagnoses can partly be attributed to people moving to the UK from parts of the world where there is a high prevalence of HIV, such as sub-Saharan Africa.
Because treatments have improved dramatically in recent years, the number of people dying from Aids has decreased; even so, it remains incurable. The two groups bearing the brunt of the epidemic remain gay men and Africans - although only 1% of the total population of Britain is adult gay men, they make up almost half of the people living with HIV.
This means gay men are about 90 times more likely to be living with HIV. Similarly, although African people account for about 1% of the population in Britain, 33% of those living with HIV are African, which means African people in Britain are about 50 times more likely to be living with HIV than other ethnic groups.
No one needs reminding that worldwide - and indeed in the UK - HIV is a massive health crisis. But, in affluent countries, it is no longer a death sentence. As a result of medication, there are plenty of long-term survivors. The drugs mean some who were forced to live on benefits have now boosted their immune systems and have been able to return to work.
Clearly, someone who is well and working can benefit from financial advice, but a few problems still remain. Alan Dickinson, a consultant with London-based IFA, Ivan Massow, says term cover remains largely out of bounds and there is still much to be done in terms of lobbying.
"I cannot say that matters are much better since the statement of best practice. If anything it is getting more difficult in general, as more insurers introduce electronic application forms, which mean clients can be rejected without being accurately assessed. And while they may be less obvious, insurers are still asking lifestyle questions," he says.
Prejudice
Dickinson says given many people with HIV now have reasonable lifespan expectations, there is no reason why they should not take out mortgages. "In terms of protection, we'd encourage people with HIV to look at savings options and also to work for an employer that offers a good level of death in service, such as four times salary," he says.
There have been attempts to encourage take-up of protection cover among HIV positive clients however. In August 2003, protection intermediary Your Money Now, launched a term assurance policy underwritten by Lloyd's syndicate Kiln, aimed at those with HIV. The policy had a maximum term of five years and similar products exist in Holland, the US and France. But it has failed to take off. Director of Your Money Now, Colin Barrett-Treen says: "We had high hopes, but ended up with few inquiries. We're no longer marketing the policy. Where we were able to quote, the prices were too high."
Insurer PAFS specialises in the impaired life market, but at present, does not cover those with HIV. Underwriting director, Gaynor Waterman, says this is because it remains a small market and would also be expensive to underwrite. "You would need to assess the current health of the individual, looking at viral loads and CD4 counts. We have looked at this area, but currently we don't think demand would be high enough - you need a sufficiently big pool to make it worthwhile," she says.
As far as term cover goes, insurers want volume. More underwriting is being done electronically and margins are not there for detailed medical analysis. There is a small market for impaired life annuities, but this again tends to focus on where there is most experience, such as cancer, says Kevin Carr, senior technical adviser with IFA LifeSearch.
"This is an extremely consumer driven market and there is cherry picking. We don't want to see any prejudice. There are straight people who are far more promiscuous than gay people," he says.
Apart from term cover, HIV is excluded in most other protection products such as accident, sickness and unemployment cover, critical illness and private medical insurance. But, progress is certainly being made.
There are specialist travel policies offering cover for those with HIV and income protection, and as a result of the Disability Discrimination Act, UnumProvident has announced that all quotations for its group schemes will automatically have HIV/Aids cover included from April 2004.
Looking ahead, it seems more providers may follow their lead. Malcolm Tarling, spokesperson for the ABI, said insurers should start looking at providing more accessible policies for those with HIV as prognoses improved and medical knowledge increased. "So far, there is not a great deal of demand, but, as knowledge grows, we can expect some to start investigating the market," he says.
Rachel Gordon is a freelance journalist
The ABI's Statement of Best Practice
The statement, published in October 2004, is designed to allow insurers to assess applications for cover where HIV may be an issue, but in a way that avoids intrusive or inappropriate questioning. The statement secures the principle that insurers should assess insurance applications fairly, taking into account the degree of risk. The statement sets out the questions that it is reasonable for insurers to ask in order to assess the risk of HIV. The questions identify behaviour that increases the risk of HIV and do not ask about sexuality. The best practice question that will apply to all is: 'Within the last five years, have you been exposed to the risk of HIV?' This can be caught through unsafe sex, intravenous drug abuse or blood transfusion. Any explanations required relating to these must relate to behaviour and not sexuality. The full statement is available on the ABI's website: www.abi.org.uk
The US experience
In the US, Impaired Risk Specialists, based in Illinois, started offering life cover to HIV positive people in 1997. The company, a subsidiary of Guarantee Trust Life, also offers cover to those with other medical and emotional conditions, including those with a history of drug abuse. To obtain HIV cover, the person must be between 21 and 49 years old; be able to work; lead an active life; and meet certain medical conditions, including having a limited amount of the virus within their bloodstream. Impaired Risk Specialists does not insure people who have developed full-blown AIDS. While Impaired Risk Specialists set premiums higher for HIV-positive people than for healthy people, the company says these are not its highest. For example, policyholders who have had a double-lung transplant have higher premiums than those with HIV. The same variables that affect a healthy person's life insurance premium also affect people who are HIV positive: their age, whether they smoke, and their gender. Since HIV treatments have progressed and lengthy remissions are more common, Impaired Risk Specialists says it continues to monitor the relevant research and says it will adjust their premiums when research warrants it. Premiums won't drop with each new medical advance, however.
COVER notes
• The publication of the Association of British Insurers' (ABI) Statement of Best Practice on HIV and Insurance in October 2004, has established an industry-wide agreement to stop asking pejorative questions and to treat everyone applying for insurance fairly.
• In 2003, the biggest rise in those affected with HIV was among heterosexuals, although gay men represent the majority of those with the virus.
