On World Aids Day today, we look at how the life assurance industry has changed its approach to this illness. An increase in research and a reduced stigma around HIV has resulted in a revision of life assurance products available to HIV-positive clients.
Liberty recently announced that its flagship life product, Lifestyle Protector, is now available to people living with HIV – with life cover of up to R5-million.
The company is also making its EduCator benefit available, to ensure that children of people living with HIV can continue with their education even after the passing on of their parents.
Steven Braudo, chief executive of Liberty Retail, says, “We know that HIV is manageable. Advances in the treatment of HIV mean that people are able to live with the condition as one would with any other chronic ailment such as diabetes. People living with HIV can access our Lifestyle Protector product just like any other customers. No additional requirements will be asked of them.”
Altrisk, which was the first life assurance provider to offer cover for HIV+ clients in 1999, says experience has proven that HIV is a chronic illness much like diabetes. “The reality is that in almost 14 years, Altrisk has only ever had two HIV claims – a trend that demonstrates that HIV has become a manageable condition like any other chronic illness.” Altrisk says that its underwriting statistics show that clients with pre-existing conditions, such as heart disease or diabetes for example, can have loadings that are significantly higher than many HIV+ clients with well managed conditions.
Comprehensive financial protection
Jaco Gouws, marketing actuary at Old Mutual, says: “The massive resources allocated to HIV/AIDS in the last 25 years mean that it’s now one of the most researched and understood conditions in the world. And as that understanding has evolved, so has actuarial science, which has enabled us to refine our underwriting and provide comprehensive financial protection for those living with the disease.”
Gouws points out that the great strides in understanding the condition and advances in antiretroviral therapy have enabled life assurers to group HIV/AIDS with other chronic conditions like diabetes and hypertension, which can be controlled with medication, therapies and management of lifestyle. “It’s also enabled us to provide more affordable cover than ever before, because we now have a better understanding of each customer’s risk.”
Managing and living with HIV/AIDS has become significantly less onerous and expensive as the years have gone by, Gouws explains. This is due to the simplification and increased efficiency of treatment: 10 years ago, patients had to take around 20 pills a day and the medication had unpleasant side-effects. Today, that burden has been reduced to one pill daily.
Part of removing the stigma around HIV/AIDS is the ability of financial services providers to protect the most valuable asset of someone living with HIV, their income. This will allow consumers to financially protect their families, business and their retirement savings, Gouws says. “People living with HIV now have the power to do great things with their money, just like everyone else,” he adds.
Gouws noted that up to now separate products were offered to HIV+ individuals. That has changed and they are now offered a similar comprehensive range available to HIV- individuals. You can apply for cover with Old Mutual without being on or having to prove that you’re on antiretroviral treatment.
What cover can you expect:
Different life assurers will offer HIV-positive clients different levels of cover. Before you commit to any financial product, make sure that you clearly understand the terms and conditions of the policy. Policies may have onerous exclusions, compliance requirements and waiting periods which will not be in your best interests and could be a serious problem when it comes to claims stage and when you need the cover most.
You should always get advice before buying any financial product, Gouws says. “We are all unique and have specific financial needs. It’s important to speak to an adviser about which product best suits the needs of you, your family and your business.”
1. Liberty: does not require people living with HIV to be subjected to regular testing. Clients living with HIV will be underwritten at application stage and if they are accepted, will be treated in the same manner as any other clients with a health condition.“We don’t believe it is appropriate for people to lose their cover if they can no longer adhere to their treatment regime, as their need for life cover is completely separate from their ability to adhere to a treatment regime or their body’s ability to respond positively to treatment,” says Nicholas van der Nest, divisional director of risk products at Liberty.
In May 2002, the Constitutional Court of South Africa ruled that Nevirapine should be available to all HIV positive pregnant women and their infants, who give birth in any public sector facility. As a result of this intervention, many of these children are born HIV negative. Liberty also offers HIV positive clients the EduCator benefit, to ensure that their children, who may be HIV negative can continue to go to school.“We believe that offering our EduCator benefit to HIV positive clients will meet a real need – ensuring access to a better future for children who are affected and impacted by HIV and Aids. This is important to us because we recognise the need for parents to ensure that their children are able access an education in the event that one or both parents pass away,” notes van der Nest.
2. Altrisk: HIV+ applications can follow one of two routes.
Scenario 1: If you are already HIV+ when applying for cover and on antiretroviral treatment, underwriting will be based on your condition at application stage. In this scenario treatment adherence is not a condition for cover, however ongoing adherence may result in lower premiums.
Scenario 2: If you were diagnosed with HIV recently, or find out at application stage that you are HIV+, cover where granted will be conditional. You will be required to adhere to a treatment programme once your viral load and CD4 count reaches a certain level. These measurements show if you have become, or are at risk of becoming drug resistant and provide an overall view of how the disease is progressing.
No ongoing additional reporting or submission of blood tests is required during the cover period, but at claim stage Altrisk will request a report from the treating HIV clinician to determine compliance with a treatment programme.
In the event of non-adherence, Altrisk will still pay claims for natural death causes not related to HIV at 100% of the cover amount. Claims for accidental death causes are also paid at 100% of the cover amount by Altrisk regardless of adherence. Where there is a claim for natural causes related to HIV and the client did not adhere to their treatment regimen, Altrisk will limit the claim to 10% of the cover amount.
3. Old Mutual: offers two suites of products. Old Mutual’s LifePlan offers death and disability cover. As only limited underwriting is required, cover is limited to R500 000. The other option, Greenlight, requires full underwriting including medical tests. A more comprehensive range of benefits including death, disability and severe illness (an industry first) can be offered on this option, as underwriting allows better understanding of the health of the person. You are not limited to the amount of cover you can apply for.
Gouws says: “We are particularly proud to offer severe illness protection. Cancer, heart disease and strokes don’t discriminate on your HIV status. You therefore need every chance to fight and recover from these diseases. HIV+ people can now do this with severe illness protection.”
Important questions you should ask:
- Is cover linked to a treatment regime?
When it comes to assessing an HIV+ applicant for cover, an important consideration for the underwriter is a track record of compliance with the ARV programme as well as the critical measures used to manage the condition. Factors such as having medical aid, access to medical treatment and family history, current lifestyle and income and education levels will all have an impact on your premium.
- Does your CD4 count have to be at a certain level?
CD4 is a measure of the strength of the immune system. The average CD4 count of a healthy HIV-negative person is between 400 -1700 per cubic millimetre of blood and this would be taken into consideration by the underwriter.
A brief history of the treatment of HIV in the insurance industry:
- 1980s – Pre-HIV, insurance products and underwriting practices made no allowance for detection of the disease.
- Late 1980s – HIV becomes better known in the rest of the world, with South African insurers doing significant amounts of research to determine the best way of dealing with the disease.
- Early 1990s – South African insurers continue offering the same cover, but add an Aids exclusion clause on all policies and start testing applicants for HIV at the inception of the policy. Any person who becomes HIV positive during the term of their policy is disqualified from cover and nobody who is HIV positive at policy application stage qualifies for cover.
- Mid 1990s – Re-testing policies are introduced. The insured is expected to undergo an HIV test every 5 years. If they don’t undergo the repeat test or they test positive, the sum insured would fall to 10% or 20% of the original sum insured with no change in premiums. HIV exclusion clauses do not however apply to these policies.
- Late 1990s – Some insurers start offering term cover to HIV positive lives, generally with short term period options of 5 to 10 years only. Only very healthy HIV positive lives qualify for cover under these contracts and premiums are generally high relative to other products.
- Late 1990s to early 2000s – AIDS exclusion clauses start falling away, with life insurers only requiring a test at inception. The probability of contracting HIV and subsequently passing away from Aids after policy inception is priced for with the help of the ASSA Aids models.
- Mid 2000s – Niche insurers start offering HIV positive lives cover subject to adherence to a stated treatment regime or protocol. Tests are required on a four to six month basis and, if deemed non-adherent, cover falls to 10% of the original sum insured. Term and whole of life cover is made available.
- 2013 – Major insurers start offering HIV positive lives life cover as part of a normal product, subject to extra mortality loadings only. Qualifying criteria vary from insurer to insurer.
- This article was first published in City Press on 1 December 2013.