Can You Get Life Insurance If You Have HIV?
Until recently, it has been very difficult for HIV-positive people to find life insurance coverage. Life insurance options were limited to group life insurance, offered through employment or a group, or last-resort life insurance, such as guaranteed issue life insurance policies.
But with medical advancements, people with HIV are living longer and having fewer complications from HIV-related illnesses. Because of this, some states are proposing bills for life insurance to be accessible to people with HIV. Some life insurance companies are also adjusting their underwriting process to meet the needs of people living with HIV.
The state of California has passed Senate Bill 961, The Equal Insurance HIV Act, which was introduced by State Senator Lena Gonzalez. The bill provides anti-discrimination protection and says that insurers cannot refuse an applicant for life insurance based solely on a positive HIV test. The bill goes into effect on January 1, 2023.
With this bill going into effect in California in the future and insurers just opening up to HIV-positive people, life insurance companies are balancing ethical behavior and risk management to introduce HIV life insurance. Underwriting during a traditional life insurance policy’s application process must also be reevaluated to adjust to applicants living with HIV.
Ethical Standards in Life Insurance
Life insurance agents and insurers are expected to act ethically and resolve ethical problems as they arise. Ethics, as it relates to insurance, refers to behavior, conduct, and actions as opposed to personal beliefs, which are considered morals. State regulations that govern unfair and prohibited practices cannot take disciplinary action against insurers or agents for their morals.
When working in a business, you may perform duties that you don’t believe are right, such as rejecting an applicant based on their health status. But you are obligated to because the risk is considered too great by the insurance company. And vice versa: you cannot deny a person coverage based on factors considered acceptable risks. Smoking is an example of acceptable risk.
As a business and not an individual, you have a better ability to make an impact on the world. For example, an individual who donates a percentage of their income to a charity most likely wouldn’t make as much impact as a business that donates a percentage of their earnings. Due to this, life insurance companies can make a greater impact when including people living with HIV.
The CDC reports that 1.2 million people in the United States are living with HIV. They state that advancements in treatment and care have enabled people with HIV to live just as long as people without HIV. Because people are living longer with HIV, the applicant’s risk of loss to an insurance company has decreased.
Underwriting is the part of the life insurance application process when it is determined whether to accept or reject an applicant based on their risk. A risk in life insurance means the chance of loss. If an applicant is approved for a policy and subsequently passes away a year later, the insurance company has more than likely suffered a loss due to a payout without collecting many premiums.
Life insurance is concerned with pure risk, which involves only the chance of loss and no gain. This is contrary to a speculative risk, such as investing in the stock market, which can result in loss or gain. Elements of an insurable risk to a life insurance company are as follows:
The loss must be definable as to time, cause, and location.
The loss must be measurable; the value of the loss must be definite.
The loss must be due to chance and outside of the insured’s control.
The loss must be a part of a large group of similar risks that insurers can use to predict future losses.
Loss cannot be catastrophic, such as wars.
The risk cannot be a part of the insurance company’s stated exclusions.
When assessing the risk of applicants with HIV, insurers may ask health questions related to your antiretroviral therapy, viral load, CD4 count and may request information from your doctor.