How to get life insurance when you're HIV-positive

By Michelle Matlock, Life Quotes, Inc.

Although there have been medical advancements that have helped to prolong the lives of HIV patients, finding life insurance coverage for HIV infected individuals continues to be elusive.

According to the most recent statistics by The Henry J. Kaiser Family Foundation, the number of new HIV infections in the U.S. reached 56,300 in 2006. The number of people living with HIV/AIDS was 1.1 million, with 468,000 of those individuals living with AIDS. The U.S. Department of Health and Human Services reported in 2007, that the largest number of new HIV/AIDS diagnoses for persons aged 40 to 44 accounted for 15 percent of all HIV/AIDs diagnoses in that year.

Respectively, the use of antiretroviral (ARV) Therapy or highly active antiretroviral therapy (HAART) such as protease inhibitors with a combination of other HIV drugs have extended the life of those living with HIV by slowing the progression of the disease to full-blown AIDS. A study by the National AIDS Treatment Advocacy Project in New York and the ATHENA National Observational Cohort Study in February 2010 found that the average life expectancy of people living with HIV has been extended from seven years (before 1995) to 24 years — if they follow the proper drug therapy regimen. This includes those who take their medications on a regular basis and maintain a healthy lifestyle.

Ryan Pinney, brokerage director and life impaired risk specialist at Pinney Insurance Center Inc. in Roseville, Calif. says following the introduction of drug cocktails that counter the infection— people with HIV can expect to live longer healthier lives.

"If you contracted HIV in the late 70s or early 80s, it was a death sentence. Nowadays, with the addition of antiviral drugs, it is not uncommon for people with HIV to live 20 years without the condition developing into AIDS," says Pinney.

If you have a strong prognosis at the start of the illness, meaning you have managed to keep your CD4 T-cell count above 500 cells for at least three years, chances are you will have a greater life expectancy. In July 2008, a study conducted by the University of Bordeaux, France found that HIV-positive males whose CD4 count was above 500 cells for an average of three years, had death rates that were identical to those in the general population. Unfortunately, among HIV-positive women, the death rates didn't balance out even after five years of maintaining a count above 500 cells. In fact, HIV-positive women experienced a 2.4 percent increase in death rates when compared to the general population. More studies are pending that help explain this phenomenon.

Pinney notes that for people who contract the disease at a young age, the improbability of receiving a life insurance policy is higher. However, if you have lived longer with HIV, it might be easier to get a policy.

"The reason for this is because you have a proven track record of maintaining the illness," says Pinney.

Dr. Ann Hoven, chief medical officer for the Individual Life Division at the Hartford, says that insurers have considered the possibility of covering HIV, but there are still a number of unknowns.

"The basic dilemma is that although the life expectancy for someone with HIV can be over 20 years, those who become newly infected are younger people," says Hoven. "The life expectancy of a person with HIV is more like 40 to 50 years of age, and most people expect to live to be in their 60's, 70's and 80's."

She adds that it can be difficult to make assessments of a person's life expectancy with HIV and set premiums based on the information they receive.

"The data really isn't there yet," she says. "There are people who seem to be resistant to infection where their immune system takes care of it, and then there are others that are completely vulnerable to this illness. The results of the studies that have been conducted haven't provided any definitive data to pull from when it comes to estimating how long an individual can live with this illness. It's very case by case."

Limited options

When it comes to purchasing life insurance, most people who have been diagnosed with HIV will be faced with an automatic decline or enormously high premiums.

"You would have to have a breakthrough to make the numbers work out when trying to write a policy for someone with HIV," says Hoven. "When you look at the numbers the cost would be so astonomical that no one would buy it [the policy]."

"If you have been diagnosed with HIV, getting life insurance may be tough, but it's not unheard of," says Pinney. "It can be accomplished if you receive insurance through a group plan, such as an employer, trade association or union."

However, if you are HIV-positive and you attempt to get life insurance on your own, most insurance companies will refuse to sell you a policy, this includes companies that offer "simplified issue" life insurance coverage where you would only have to answer a few health questions. Even when applying for a simplified issue policy, you will likely be required to answer questions about HIV/AIDS. Other, more traditional individual life insurers may also ask that you take an HIV test.

"The requirement by insurers of an HIV test varies by state and the face value of the policy," says Kim McKeown, spokesperson for the Society of Actuaries. "Nonetheless, the underwriting process is used to discern information on one's medical profile, and if the person is taking antiviral drugs which would be found in the medical record, this might prompt an insurer to ask for an HIV test. Even with the best medication, folks with HIV do have a shortened life expectancy so the best information possible is critical during the underwriting process."

Mckeown adds that from an insurance company's perspective, asking a potential policyholder to take an HIV test is really no different than asking someone about his or her family health history, what types of prescriptions they take daily, or if they smoke.

If you are able to get a simplified issue insurance plan, they have a limited face value amount, typically $150,000 to $250,000 on the high-end of the spectrum.

A more viable option is purchasing a "guaranteed issue" life insurance plan. When a policy is considered "guaranteed issue" this is the maximum amount of coverage allowed to an individual without a medical evaluation. Anyone can purchase a guaranteed issue plan since they do not require a medical exam, but they are usually nuts and bolts policies that only provide a death benefit. The death benefit is generally $20,000 or less and if you die within the first two years after you buy the policy, your loved ones could receive nothing.

There are also small group plans to consider that are essentially employer-sponsored specialty plans that cover key employees at a company.

Pinney recalls a situation where a group of partners at a firm requested a guaranteed issue group plan that would cover all the senior and junior partners at the firm. One of the individuals was HIV-positive and the group managed to negotiate a policy that provided over a million dollars in life insurance to each person in the group.

While it's clear that this method can work, Pinney says that because of the stigma attached to people living with HIV, this is primarily the reason why most employees won't suggest this type of coverage to their employer.

While someone with HIV may be able to get a life insurance policy from an insurance company that specializes in high-risk cases, it's certain that it will most likely be a costly policy with a graded benefit. For example, a 40-year-old HIV-positive male can get a $50,000 whole life policy, but he would pay a high annual premium of $2,600.

"There are very few companies, maybe three or four that offer policies for people with HIV," explains Pinney. "What they amount to is a guaranteed issue whole life policy with a graded death benefit or a benefit that increases gradually with age and eventually levels off during the life of the policy."

Still, Pinney says that if you die during the first, second or third year of the policy you may only receive your premiums and dividends with interest, other companies may only payout a specified percentage of the benefit amount if you die within that timeframe.

Will insurers cover HIV in the future?

Guaranteed Trust Life Insurance Co. based in Glenview, Ill., was the first insurance company to offer "impaired risk" whole life insurance to HIV-positive individuals. The company ceased selling the policies in 2004.

"One of the biggest problems with pricing an HIV policy is figuring out how to price it without getting beat up," recalls Pinney. "At the start of offering such a product policyholders were looking at a flat extra of $50 per $1,000 in insurance."

Pinney said that recently he attended a life insurance conference and posed the possibility of an HIV life policy to major life insurers. Unlike HIV, other medical conditions, such as cancer or heart disease have a longer track record of people having these conditions and better statistical data that an insurer can draw from. Even though HIV/AIDS has been around since the early eighties, Pinney notes that the underwriting science hasn't caught up with medical science yet.

"I don't see this type of product entering the market again anytime soon," notes Pinney.

"Part of the problem is there is no mortality data available to create an accurate pricing model. I would be surprised if any insurance company would even remotely consider it for quite awhile."

"When we solve the societal issues concering HIV and find better ways to treat the illness or even a vaccine, I think that will be when the situation changes," says Hoven. "I really don't see this happening in the next five years, but we're definitely getting closer to it. "

Hoven recommends that if you have been diagnosed with HIV and your employer offers life insurance, it's best to take advantage of it.

"You wouldn't go through medical underwriting and you would receive the group-based premium that includes people who have a variety of different medical concerns," says Hoven. "Also, if you retire, most group plans allow the policy to be converted to a whole life policy."

Whose at risk?

From 2004 to 2007, the numbers of HIV/AIDS diagnoses increased among men who have sex with men (MSM).

In that same timeline, the estimated numbers of HIV/AIDS diagnoses increased among male and female adults and adolescents with HIV infection attributed to high-risk heterosexual contact.

Cumulatively, MSM (53 percent) and persons exposed to high–risk heterosexual contact (32 percent) accounted for 85 percent of all HIV/AIDS cases diagnosed in 34 states in 2007.

By gender, 77 percent of adults and adolescents living with AIDS were male. Of the 104,560 female adults and adolescents living with AIDS, 66 percent were exposed through heterosexual contact.