The majority of South African life insurance companies have agreed to pay HIV/Aids claims as from April 1. Around 5.4 million South Africans are infected with the HI virus.
The move was announced by the industry body, the Life Offices’ Association (LOA). It said that as from next week 29 of its 36 members will no longer apply existing HIV/Aids exclusions to life and disability policies.
This follows a best practice recommendation by the LOA to waive existing HIV/AIDS exclusions for all lump sum death and disability benefit claims. As a result, going forward, no claim for a lump sum death or disability benefit will be denied by any of these life companies based on the HIV/AIDS status of the insured person, unless the policyholder is found guilty of material non-disclosure.
Making the announcement at a joint media briefing on Tuesday with the AIDS Law Project (ALP), Gerhard Joubert, CEO of the LOA, explained that the HIV/AIDS exclusion clauses will be waived for all types of life and disability cover that pay lump sum benefits, including group life, credit life and funeral cover. However, the waiving of exclusions does not apply to:
- Income protector policies and hospital cash plans.
- Policies requiring regular HIV retesting.
- Cases where policyholders committed material non-disclosure. This is particularly relevant to low premium policies like funeral policies that often rely on disclosure rather than HIV testing.
Fatima Hassan, senior attorney with the ALP, described the decision as “totally groundbreaking and one of the biggest moves the life industry has ever made. We believe that uncertainty about this disease resulted in the life industry imposing an outdated model on people living with HIV/AIDS.”
Hassan noted that there has been a massive shift within the life industry over the past 10 years in its approach to HIV/AIDS.
“We have been lobbying the life industry to drop HIV/AIDS exclusions for a number of years. And at last people have been given the security and peace of mind that their life and disability policies will pay out the lump sum benefit they have been paying premiums for even if they contract HIV/AIDS.”
Dr Pieter Coetzer, convenor of the LOA’s Medical and Underwriting Committee, said that over the past decade vast improvements have taken place in the treatment of HIV/AIDS.
“Initially, there was no treatment for HIV and the disease was therefore not insurable. Now, provided there is full compliance with ART (anti-retroviral treatment) prescriptions, HIV/AIDS is considered a chronic treatable disease like diabetes and many other chronic diseases and is therefore insurable.”
Dr Coetzer said although most existing cover options remain fairly expensive, some life insurers are in the process of developing new generation products that will offer competitive premiums for HIV positive people on an ART programme.
He said the history of diabetes is a good example of how cover becomes available and cheaper as sustainable treatment options are introduced and insurers gain a better understanding of a disease.