Life insurance, Medical Schemes and HIV
Advances in medical treatment and the wider availability of Anti-Retroviral drugs make it possible for HIV positive individuals to manage their condition more effectively. The resulting improvement in quality of life and life expectancy create many challe
The prevalence of HIV infection in South Africa is amongst the highest in the world. Findings published in a 2005 UNAIDS report reveal the extent of the problem:
"South Africa's epidemic is one of the worst in the world with an estimated 5.5 million people (18.8% of adults) living with HIV in 2005. Almost one in three pregnant women attending public antenatal clinics were living with HIV in 2004 and trends show a gradual increase in HIV prevalence. There has been significant scale-up in the treatment front - around 190 000 people were receiving therapy by the end of 2005 - however this still represents less than 20% of those in need."
Is the financial services sector ready to meet the HIV challenge head on? Medical Schemes are already on track, with the long-term insurance industry slowly realising that there are 5.5 million potential clients that they are not selling to.
Medical Schemes lead the way
Steps to prevent Medical Schemes from discriminating against HIV positive individuals have been in place since 2000. In particular, the Medical Schemes Act advocates 'guaranteed acceptance' to prevent the exclusion of members with HIV.
The Act also stipulates that Medical Schemes may not charge higher contributions based on the perceived risk of an individual living with HIV. HIV positive individuals should receive the same Prescribed Minimum Benefits (PMB) as individuals without the condition.
The bottom line is that members in an open medical scheme will be charged the same contribution regardless of their HIV status.
It remains to be seen whether the life insurance industry will be forced to change their stance on providing cover to HIV positive individuals.
Life insurance for HIV sufferers
The first life insurance products for HIV positive individuals were launched by a company called All Life, in partnership with Nova Life Partners Limited. All Life first offered life insurance to HIV positive clients in December 2005.
Ross Beerman, managing director of All Life, said at the time that "the introduction of broad-based insurance for HIV-positive consumers will revolutionise the life insurance industry in this country."
In recent developments, All Life increased the cover available to HIV positive individuals by providing for life insurance up to R3 million. The reason such products can be offered relate to improvements in the quality and reach of HIV treatment.
This life insurance is sold with specific conditions attached. HIV positive clients will have to undergo regular medical tests and submit these results to the insurer. They will also have to take Anti-Retroviral drugs as prescribed.
More access to life cover
Life insurance products such as those offered by All Sure will ensure that more of South Africas 5.5 million HIV sufferers fall into the 'insurable' category.
Life insurance companies will eventually have to follow the Medical Schemes and treat people living with HIV in a similar manner to those living with other chronic illnesses. We expect it will not be too long before other major insurance companies enter this market.
As Beerman says, "most of our clients have only heard the message that HIV equals Aids equals death. We get to give our clients a very different message - treat HIV appropriately and it is a chronic, manageable disease."
