Life insurance is designed to provide protection for your loved ones upon your death. It is a contract between you and your insurance company to give your designated beneficiaries a specified amount of money. If you were to pass away unexpectedly, your family would not be burdened with your debts from credit cards, home mortgage, school loans, and other liabilities. Your life insurance money would help to pay for everything. What is different with HIV life insurance?
In order to minimize their risk, insurance companies can decide which individuals are able to purchase a policy. In the past, HIV positive individuals were restricted from obtaining life insurance.
In the 1980s when HIV and AIDS were relatively new and misunderstood, no life insurance company was willing to take the risk and offer plans to those infected with the infection.
Now, things are different. With the improvement in HIV medications and procedures, along with the improved life expectancy for people with HIV, there are many plan options available to HIV patients today. And, insurance is becoming more affordable. This is good news for the 1.2 million Americans who currently have HIV.
Like many other serious or chronic conditions, it may be difficult to find an insurance company that is willing to sell you a life insurance policy. There are some options available, but they are more costly. These include:
- Group Life Insurance
Many employers offer life insurance through a group policy. For HIV-positive individuals, this is a great option because there is no medical exam or health forms to complete. Instead you simply need to “check a box” stating that you’d like to enroll.
For the average person, the costs of a group plan are generally higher than buying your own life insurance. A group plan generally insures more people that pose a higher risk and may need a payout sooner. As a result, everyone pays the same premium in a group insurance plan. However, this is good news for those with HIV—your group rate is the same as a healthy person!
Paying for a group life insurance plan is easy: your employer will take a small amount out of each paycheck to put towards the plan. So, there are no extra bills to worry about. Be aware of your company’s insurance policy. The benefit amount may be capped. In fact, it may only be worth double your annual salary, which is much lower than other private insurance options.
- High Risk Insurance
If your employer doesn’t offer life insurance, or you are interested in shopping around, there are other choices available. Some insurance companies specialize in providing coverage to individuals who are in a high-risk category due to their health or hobbies. If you choose this option, your insurance agent will ask you some questions about your HIV, such as the date of your diagnosis, current medications, treatment schedule, and any future procedures you expect to have. They may also ask for documentation from your clinic about your diagnosis and the details of your treatment thus far.
- No Exam Life Insurance
Much like group life insurance, a no-exam plan does not require you to provide any health information before purchasing a policy. With an illness like HIV, many insurers will not want to take on the risk of having you as a policyholder. However, no exam life insurance means that you will not be denied coverage.
No exam life insurance is an umbrella term which includes a few different policy types. So, if you are interested purchasing coverage, choose a guaranteed issue plan. Just like its name, you are guaranteed to be accepted for coverage. The process of obtaining a plan is very quick and the benefits start as soon as you are approved.
As with each of the life insurance options available to HIV patients, a no-exam policy will come at a higher cost. This is because your insurance company does not know if you will be a higher risk or not. They are taking a chance by accepting you as a policyholder, and will charge you a higher premium as a result.
In addition to cost, keep in mind that your policy may be capped at a lower benefit rate, have fewer benefits, or may not be able to be renewed at the end of the term.
- Critical Illness Life Insurance
To the insurance industry, HIV is considered a high risk or critical illness. This means that your life insurance options are limited and cost more. However, more options have been developed recently to cover individuals with greater health problems, like critical illness insurance. Also called trauma insurance, serious illness insurance, or living assurance, it is a form of secondary health insurance to help cover the expenses associated with your illness.
Though it is health insurance, a life insurance plan can be added as a “bolt-on benefit”. Unlike the other three life insurance options, critical illness is not for those who already have HIV, but rather for those who develop it after they already are insured. Of course, it covers other serious conditions as well, like cancer, Alzheimer’s disease, and kidney failure. So you will be protected against the high costs of a variety of illnesses. If you are diagnosed, you can contact your insurance company and will receive a single, lump sum that ranges between $10,000 and $1 million.
Speak to an Agent
If you have HIV and are considering purchasing a life insurance policy, speak with an independent life insurance agent today. They will have the knowledge and experience to recommend the best insurance to suit your needs.
When you speak to an agent, you ask if you should disclose your HIV diagnosis to the life insurance company. Your agent will tell you that when a medical examination is required prior to purchasing a policy, you should be honest. Never falsify information on an insurance document. If there are no medical or health forms, then you do not need to share your medical history.
Keep in mind that whether or not you are asked to provide your health history and current medical conditions, many life insurance companies have a contestability clause. This is generally part of your policy for the first two years after you purchase life insurance. The clause allows the insurance company to cancel your policy or deny a claim if you falsified any information about your health.
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