Your HIV status does not have to determine whether you get life cover.
Insurance is a contract between two parties, the insurer and the insured, where the latter undertakes to honour his/her monthly payments (premiums) to the insurer and the former (insurer) pays to the insured, a certain sum of money or the equivalent of the money when the unexpected event insured for happens.
Since a contract is between an insurer and an insured, the third person takes the position or is nominated as the beneficiary. The third person can then have another contract with the insurer once accepting to “benefit” from the policy. Insurance contracts are usually written and nothing more. There are various types of insurance products with different names. One that is very difficult to get and is also expensive is HIV life insurance.
This insurance is either very expensive or difficult to obtain for someone who has tested positive for HIV. It is believed, within insurance circles that the risk of dying for an HIV positive person is high and, as a result, insurance companies refuse to give life insurance to the infected despite a lot of people living longer lives due to antiretroviral drugs and other medical advancements.
What is Life insurance?
Life insurance is a policy that pays out a certain amount of money when the policy holder passes away. Life insurance is the most popular product in the insurance family. The high demand for it has prompted companies to offer various types of life insurance to meet the needs of various segments of society.
Also, insurance companies find themselves competing for the same people and offering various products. These products include life assurance, term life insurance and credit life insurance which, for all intents and purposes, can be considerd to serve a different purpose than general life insurance or HIV life cover.
Who can be a Beneficiary?
The main reason people take out a life policy is to ascertain that their dependants are taken care of when the policy holder dies due to natural or unnatural cause during the period of the policy.
So partners and children of the deceased are usually the beneficiaries. The policy does not just pay out any amount, only the amount insured for is payable to the beneficiary. In essence, when a policyholder enters a contract for a life insurance with an insurer he agrees to pay a particular premium on a monthly basis without fail.
Who Needs Life Insurance?
People who take life insurance are usually married with kids or have joint mortgages with other individuals. The money comes in handy to assist those left behind particularly if they relied on the dead person`s salary for survival. The insurance will certainly cover school fees, grocery and many other costs related to day to day living of the dependants. The payout usually is done as a once off payment.
The Cost of Premiums
The premium payable is dependent on various factors including a person`s education, their occupation, the total payout they need, the length of the payment period, their gender, health as well as their medical history.
Women are generally viewed as low risk when it comes to insurance. Even if they have HIV, their life expectancy is also higher than for men. For example, someone who has been diagnosed with HIV won’t pay the same amount as someone negative who requires the same policy with similar factors.
HIV/Aids in South Africa
South Africa has been grappling with the issue of HIV/Aids for a while and it is rumoured that more than five million individuals are infected with the virus. Efforts by government to curb the spread of the virus have been met with resistance due to various factors such as cultural beliefs and poverty amongst other things.
Apart from efforts to reduce the spread of HIV South African government has been rolling out antiretroviral drugs to those infected so that they can lead normal long lives. With so many people infected it is possible some people with disposable income who qualify for life cover cannot be assisted by the mainstream insurance companies to get a life policy.
HIV life insurance
Statistics shows that a sizeable number of people in South Africa are HIV positive which has prompted some insurance companies resume offering HIV life cover. It is only in recent years that someone who has been diagnosed with HIV is considered for life insurance but at a high price. Unfortunately, people living with HIV pay up to 50 percent more than those with negative HIV status.
In the past people who tested for HIV were completely ignored for life insurance because they were deemed a serious risk and still are by certain insurance companies. With drugs that prolong lives of people infected with HIV more and more insurance companies are starting to offer HIV life insurance.
Refusal to give HIV-positive individuals life cover
Insurance companies are refusing to give HIV-positive individuals life cover as well as medical insurance and other policies critical to health and well being. In the past data pertaining to the reaction to medicine and mortality rates was not available. Since Insurance companies rely on such information to determine eligibility for life insurance it was difficult to offer life cover to those infected by HIV/Aids.
How Things have Changed
The insurance company's refusal to accept those with HIV meant that it was impossible for the infected to get life insurance and those who were most vulnerable to the pandemic also shied away from insurance companies for fear of finding out if they were HIV positive and being refused to have a life insurance.
However, things have changed and those on antiretroviral drugs have a life expectancy almost similar to that of HIV-negative people. According to latest research people with HIV, can live about 80 percent of life similar to that of people their age.
There is no guarantee that all HIV positive people get life insurance particularly from mainstream insurance companies. If they do it is usually very expensive. Insurance companies have indicated that someone with HIV has more chances of dying from a car accident than from the disease itself.
A First for South Africa
Almost 15 years ago South Africa took a bold step to be the first country in the world to offer people living with HIV life insurance. However, the insurance industry believes offering a life cover to an HIV positive individual is a risk because there isn’t much evidence showing that people with HIV can live longer. In addition many insurance companies are also offering funeral cover for those who are living with HIV.
It was also mentioned that the issue of antiretroviral medication is problematic since the overall success depends on the adherence to the medical programme by the patient. It was put forward that this state of affairs forces insurance companies to make follow ups to ensure the adherence.
Contracting HIV After Taking out Life insurance
If you get infected with HIV after you take out the policy, the insurer cannot change your premiums and you are not required to inform the insurer of the change of the new health status. In this situation, if the policyholder passes on because of HIV/Aids or related diseases the policy pays out normally.
However, if there is a stipulation in the insurance contract that states that HIV detection nullifies it. The sensible thing to do if you have been able to get a life cover before you are diagnosed with HIV, it is to never cash it out because it will be difficult to get another life policy. It is either difficult or very expensive to get a life cover once you have tested HIV positive.