Rest assured – life insurance for people with HIV

Relatively few people with HIV in the UK take out life insurance, but is that actually because it isn’t available to them? Gus Cairns investigates.

Let’s see now…life insurance is impossible to get for people with HIV in the UK, right? So you can’t get a mortgage over a certain price? And that’s a really good reason not to have HIV on your GP records, isn’t it?

No – none of the above are true. But they’re all things many people still believe about life insurance and HIV.

In fact, it is possible for people with HIV to get life insurance in the UK, and not at unaffordable prices.

However, there are still problems. You can get coverage of any amount, though something that would cover the whole of a £250,000 mortgage would cost you in the region of £125 a month. But currently in the UK, it’s very hard to get coverage for a term of more than ten years. You will probably be able to renew after those ten years if your health stays the same. In this era of high deposits, life insurance is no longer a condition for getting most mortgages, but if you want cover for the full term of your mortgage, ten years isn’t usually long enough.

The companies that do offer cover to people with HIV in the UK at present only offer it to people taking HIV treatment – which is tough on the minority who maintain high CD4 counts off treatment. Companies usually want their own medical tests done, even though most people with HIV have the same tests done by their clinic two or three times a year. Although you are entitled to nominate your HIV consultant as your physician, an insurance company may still check your GP records for non-HIV risk factors and conditions (ranging from mentioning sexual risks to other risk factors such as mental illness). And they may take a lot longer to arrange coverage.

“I’m finding that, at the moment, it’s taking companies between three and six months to agree to coverage for our clients,” says Chris Morgan, marketing manager of Unusual Risks, an insurance broker that arranges cover for the people companies are reluctant to provide cover for without some bargaining, including people with pre-existing medical conditions and people with dangerous jobs. “This compares with six weeks or so for regular coverage.”

Making assumptions

Chris made his name in the 1990s as director of Compass, a financial advice firm for gay people, but he soon found heterosexual people with HIV needing his services too. The unavailability of life insurance for people with HIV is more assumption than reality, he adds. Unusual Risks does annual surveys to find out whether companies offer it and whether people with HIV are aware they can get it.

“I have phoned up some companies,” he says, “and when I ask if they insure people with HIV the person I spoke to has said ‘Don’t be silly, why would we do that?’– even though I know their company does it.”

Potential customers make this assumption too. In the last Unusual Risks survey, 80% of respondents did not know they could get life insurance.

Why do people want life insurance?

Covering a mortgage is only one reason to get life insurance (or assurance, as many companies call it). Most mortgage providers will suggest you take out life insurance, but it is usually not a condition of granting the mortgage. You might want life insurance to cover an endowment mortgage, but you and your partner might also share expenses, loans and unsecured debts and he or she would be liable for the whole lot if you died. Maybe you want to ensure your children are cared for should you die during their childhood – the payout, if needed, can be assigned to a trust fund rather than a beneficiary.

Life insurance isn’t a necessity for everyone. A lot of people have savings, property, assets that can be sold, and pensions to protect their loved ones from disaster in the event of their death. But with them, especially in these days of low interest, you pretty much get out what you put in – and some of us may not have anything like the money children or partners might need if we died early. With life insurance, you take a gamble for a ‘prize’ you hope no-one will have to collect. Your loved ones get a big bonus on top of the money paid in, but only if disaster strikes.

It is the likelihood of that disaster that determines how much you have to pay for it: life insurance is one of those things that get less available as you become more likely to need it. It’s a gamble for the insurance company too; you do occasionally hear about huge losses, as when members of Lloyd’s had to fork out for floods a few years back. But in general, insurers make sure the odds are stacked in their favour, and employ actuaries to establish exactly what those odds are.

To eliminate the possibility of high risks slipping through their net, companies do sometimes explicitly exclude specific groups or insured risks from their policies. But in other cases they may make blanket exclusions which don’t explicitly mention your particular situation (such as mentioning ‘pre-existing conditions’ instead of HIV) or may simply assume that potential customers will volunteer information that may make them an insurance risk. Legally, it is up to the customer to volunteer relevant information rather than for the company to fish it out; just because a life insurance, health insurance or travel insurance policy doesn’t explicitly mention HIV, or even long-term medical conditions as an exclusion, doesn’t mean you are covered.

“People with HIV need to read the terms and conditions of any insurance they take out very carefully,” says Chris Morgan. “And they will still need a specialist policy; there is no point in applying for a general policy and not mentioning you have HIV, you will just be wasting your money.”

What are the risks?

Wayne Dam is Senior Products Actuary of the Life and Health section of Swiss Re, a multinational company. The ‘Re’ stands for reinsurance: the company insures insurance companies, which also means they have a role in establishing pricing and availability for the whole market.

Dam says: “In life insurance, the risks you are insuring against have usually been fairly predictable, unlike other types of risk like natural disaster or economic collapse. People die at a fairly predictable rate and we know how life expectancy changes with age and which groups tend to die younger.” In general, for instance, people’s annual risk of dying increases in a predictable manner as they age: at 40 you only have a 0.2% risk of dying in the next year, by 65 that risk has increased to 1.5% and by the age of 90, for those still alive, it’s 16%.¹

These calculations go awry, however, if life expectancy changes with time. “For someone to be insurable the loss insured against has to be genuine: it must be due to bad luck, not human interference; it must be significant, a real loss; and it must be predictable.” HIV, he adds, blew predictability out of the water in two ways: firstly, in the 1980s-90s, by sharply increasing the proportion of people dying early due to infectious disease (even in rich countries) and then a decade later when, due to HIV treatment, the death rate started falling in people with HIV and (in some sub-groups within the HIV-positive population) approaching normality.

Many of the life expectancy data featured in a piece HTU ran in April 2010 (see How long have I got, doc? in HTU 195). There have been few big life expectancy studies since then.

One cohort of HIV-positive people in the UK, the UK CHIC group, published new life expectancy data in October 2011.² Among this group of over 35,000 patients, surveyed from 1996 to 2008, 1248 people died out of a total of 91,203 patient-years of data collected. That’s an annual mortality rate of 1.4%. The life expectancy at age 20 – how many more years someone in the group could expect to survive – was 40 in men and 50 in women, compared with 58 and 62 in men and women respectively in the general population – deficits of 18 and 12 years respectively. Life expectancy improved considerably over the study period, especially in women. In 2006 to 2008, annual mortality was 0.95% and life expectancy at age 20 had risen from 30 years in 1996-98 to 46 years (56 years in women).

Late diagnosis contributed a huge amount to mortality: most of the risk of dying in people with HIV, at least until they get old, is concentrated into the first year after diagnosis. Life expectancy at age 20 in people diagnosed with a CD4 count of less than 100 cells/mm³ was 38 years, compared with 53 years in people diagnosed with a CD4 count between 200 and 350 cells/mm³ (people starting treatment with CD4 counts over 350 cells/mm³ were excluded from the study). In this group, life expectancy tended to approach normality with age; as people got older and survived, their continued survival approached that of the general population, whereas in people diagnosed with less than 200 cells/mm³, the risk of dying continued to be elevated.

As we found in How long have I got, doc? certain groups of people with HIV have near-normal life expectancy: people diagnosed early; those maintaining high CD4 counts; and people diagnosed in recent years.

Contrary to expectations, older people also have less risk, relative to others of their own age. People with HIV who are 25 are more than twice as likely to die within the next year as HIV-negative 25-year olds: HIV-positive 65-year olds, conversely, are only 14% more likely to die than their HIV-negative contemporaries. This is due to two things: firstly, since most of the excess mortality is concentrated into the first year or two after diagnosis, the longer you survive with HIV the longer you’re likely to survive and secondly, older people have better adherence to medications.

Specific groups of people with HIV are now relatively ‘insurable’. The risk of dying in any one year is still roughly twice what it is in the general population, but this is similar to smokers, people with diabetes and people who have been successfully treated for cancer, all of whom can get life insurance.

Wayne Dam says that continued uncertainties tend to make companies wary of offering more than relatively short-term, low-payout life insurance for people with HIV. We don’t know if the improvement in life expectancy in people with HIV will continue; improvements in drug regimens may not continue; late diagnosis and the long-term impact of HIV infection and treatment may continue to raise mortality.  

Perhaps companies should not be so cautious. There’s one country in the world where 18% of the population has HIV and collectively they own 39 million US dollars’ worth of life insurance: South Africa. That’s one in every two dollars’-worth of life insurance for someone in the world with HIV. The South African government instructed companies to make life insurance available as a general way of reducing the burden that early death from HIV was imposing on the population, and realised it would only work if it was available to everyone, regardless of HIV status, in order to avoid the ‘those that need it most get it least’ factor.

This is nothing unusual in some countries that have an insurance-based healthcare system, such as France: the burden is spread so that the sickest people get coverage. Even in the US, as long as you’re in work and can afford the huge salary slice that health insurance costs, having HIV does not exclude you. Simply barring a defined group of people from coverage is generally used as a last resort by insurance companies, who would rather take your money if they can calculate your risk.

Such a model could not apply in countries where people need considerably higher sums insured than in South Africa and where, unlike the US, there is no state interest in making companies offer insurance. A market like the UK’s leaves companies free to apply outdated knowledge to people whose risks may be changing for the better.

Even outside HIV, statisticians and actuaries have consistently underestimated the improvements in life expectancy that have in fact taken place in the last half-century. In 1971, a paper by Swiss Re reveals,³ statisticians estimated that by 2007 average life expectancy in the UK would have increased from 69.2 to 70.4 years. In fact it was 77.2 years – and has grown another year since then.

Making life insurance available – and acceptable

Robert Kneepkens is Chief Medical Officer of the life and pension section of Achmea, a Dutch insurance company that originally offered life insurance to people with HIV in 1999 but got no takers because it could not offer good terms. He was part of a working group on insurance and HIV, set up by the Verbond van Verzekeraars (VVV – the Association of Insurers), in collaboration with HIV Vereniging Nederland (HVN), the Dutch organisation of people with HIV. The country has been more advanced than the UK In liaison between the HIV community and the insurance industry. The ADI/HVN issued two reports exploring the insurability of people with HIV, the first of which received wide publicity in the Netherlands and elsewhere when it was published in 2005. It⁴ said that people on “at least moderately effective” antiretroviral therapy were insurable while the second report extended this to people who were not on treatment.⁵ This second report found that people with diagnosed HIV who were not yet on treatment had no greater mortality over the next year than people who were on treatment, as long as they were over 35 (over 30 in women) and had not had an HIV-related illness in their first six months after diagnosis.

Yet since 2005, only 400 life insurance policies have been taken out by people with HIV in the Netherlands, out of an estimated eligible HIV-positive population of 15,000 (2.7%). Why so few? Kneepkens thinks it’s for two reasons. Firstly, after a huge improvement between 1996 and 2006, the mortality rate in people with HIV compared to the general population has not improved further and so the premiums they are offered are still pricey. This comparable rate is called the standardised mortality ratio and for people who’ve never had a low CD4 count or an AIDS-related illness it’s stayed stuck at two or more. This means that in any one year a person with HIV is at least twice as likely to die as an HIV-negative contemporary. The reason is not because life expectancy in people with HIV is no longer improving. It is, but it’s no longer outstripping the general improvement in people’s life expectancy over the last decade.

Secondly, consumer pressure has driven premiums for the general public down, creating a bigger gap between what they pay and what people with added risks (like smokers) pay. Kneepkens sees this as a very unwelcome development – the opposite to the one-size-fits-all policies of South Africa. “I don’t like this,” he says. “It’s based on the lack of solidarity in modern society.”

Even if people are aware that HIV is no bar to getting insurance, and even though in the Netherlands you can get life insurance for terms of up to 30 years, they may decide that having to pay big premiums for short-term coverage just isn’t worth it and (assuming they have some) put their money somewhere else.

What’s on offer?

What’s available in the UK at present? Chris Morgan says there are currently six companies offering life insurance policies for people with HIV: Prudential (who, according to Kneepkens, based their product on the Dutch model), Liverpool Victoria, Bright Grey, Scottish Provident, Zurich and Aviva.

Chris Morgan gives three examples of coverage his firm has arranged for people with HIV:

• A serodiscordant heterosexual couple where the woman (32) had had HIV diagnosed for six years, with a CD4 count of 827 and an undetectable viral load on treatment. They had one child. They were asked to take out life insurance on their new mortgage by their bank but were intimidated by the HIV questions on their application form and asked Unusual Risks to act as intermediaries. They were able to get life insurance with £72,500 covered for £29.86 a month for the woman and £21.32 a month critical illness cover for her husband.
• In another serodiscordant heterosexual couple, the man had HIV diagnosed two years ago with a CD4 count of 403 and was on treatment with an undetectable viral load. The couple had a mortgage of £157,000 and two children. They had been turned down by their own brokers. Unusual Risks were able to get quotes ranging from £29.66 a month for £50,000 for ten years to £87.65 a month for the whole £157,000.
• A serodiscordant gay couple shared liabilities of about £100,000, which included a joint loan, credit card debts and a mortgage. The HIV-positive partner had a CD4 count of 584 and an undetectable viral load. He had also been turned down for life insurance. Unusual Risks were able to find quotes of £27.10 a month for £50,000 cover, £51.66 for £100,000 and £76.25 for £150,000.

At the moment, as you can see, being eligible for life insurance still depends on you being on treatment, with an undetectable viral load and a reasonable CD4 count, and terms of more than ten years are very hard to obtain. Chris is working with companies to try to extend eligibility and term, to get companies to accept recent clinic medical tests instead of insisting on their own, and to shorten the time that companies take to insure someone.

He still feels frustrated with the attitude of companies to potential customers with HIV – “Why are they treating this any differently to any other form of insurance? Why don’t they just take something like their over-50s plan and apply it to people with HIV?” but hopes to expand the range of clients he can find insurance for.

In the meantime, it is as much the perception of people with HIV that they can’t get life insurance as the reluctance of the industry to cater for them that is the reason life insurance for people with HIV is an option take up so rarely.   

For more information

Unusual Risks – see www.unusualrisks.co.uk or phone 0845 474 3075.

For more information on personal finance, including insurance, visit www.aidsmap.com/page/1501282.