It was nearly 29 years ago when Magic Johnson stunned the world by announcing that he had HIV (human immunodeficiency virus) and would be retiring from basketball. His courageous battle, obvious fame and outspoken advocacy for HIV and acquired immunodeficiency syndrome (AIDS) patients have made him a heroic example for many individuals in the HIV/AIDS community. He’s relatively healthy today and, in fact, just retired as president of the Los Angeles Lakers.
He purportedly discovered that he had HIV after being tested for a life insurance policy. Ironically, at the time, he was declined for the very coverage he needed. The life insurance world didn’t fully understand this medical impairment and avoided the risk altogether.
Today, however, underwriting for that life insurance policy would be very different. Magic would have likely been issued a quality permanent or term life insurance policy with a rating. The rating makes each life insurance policy more expensive, but still gives a client a viable option when life insurance is needed.
There are limits and caveats to underwriting clients with HIV. While it’s still difficult to obtain individual life insurance coverage, an advisor shouldn’t assume that life insurance isn’t an option. This holds particularly true for a pure risk management and needs-based situation (think buy-sell, estate equalization or pure personal/marital/family needs).
In the United States, approximately 1.1 million individuals are living with HIV today. Of these individuals, approximately one in seven (14%) doesn’t know that he’s infected. An estimated 38,000 new cases of HIV are diagnosed each year.1
To understand how coverage may be obtained today, it’s important to understand HIV, its causes and diagnosis, markers, progression and treatments available to people infected by this disease. Having a broad knowledge of this topic will help advisors feel more comfortable discussing this sensitive subject with their clients.
What’s HIV?
HIV is the virus that causes HIV infection. The abbreviation “HIV” can refer to the virus or to HIV infection.
HIV attacks and destroys the infection-fighting CD4 cells of the immune system. The loss of CD4 cells makes it difficult for the body to fight off infections and certain cancers. Without treatment, HIV will gradually destroy the immune system and advance to AIDS.
How is HIV transmitted or spread? The spread of HIV from one individual to another is called “HIV transmission.” HIV is spread only in certain bodily fluids from an individual who has HIV. Statistically, in the United States, HIV transmission occurs mainly by sexual encounters through contact with HIV-infected bodily fluids or sharing injection drug equipment, such as needles. Women who are infected with HIV can also pass the disease on to their children during pregnancy, childbirth or breastfeeding.
People can’t become HIV positive by hugging an individual or using the same toilet, doorknob or dish that was used by someone with HIV. It isn’t spread via mosquitoes, ticks or other insects. It isn’t spread through water, air or handshakes.
How is HIV diagnosed? To understand HIV, it’s important to understand what CD4 is. CD4 is a protein that’s found on the surface of immune cells called, among other names, “T-cells.” These cells are white blood cells that are essential to the immune system. They’re important because their main role is to send signals to other types of cells (CD8 killer cells) to attack and destroy infectious particles. When the CD4 cells become depleted or weakened, the body becomes very vulnerable to a wide range of infections that it can no longer fight effectively. HIV leads to a progressive reduction in the number of T-cells expressing CD4. Physicians refer to the CD4 levels to decide on treatments available to infected patients. Normal blood value numbers show CD4 cell counts being 500-1200 cells/mm3. When patients are diagnosed with AIDS, they generally have CD4 counts of below 200 cells/mm3. Antibody tests, antigen/antibody tests and nucleic acid tests (NATs) are the three basic types of tests used to diagnose HIV infection. Antibody tests check for HIV antibodies (CD4) in blood or oral fluid. Most home use tests or rapid tests are antibody tests.
HIV antibodies (CD4) and HIV antigens (a part of the HIV virus) in the blood are found with antigen/antibody tests. NATs specifically look for HIV in the blood and aren’t as common.
When individuals are initially tested for HIV, they’ll generally be given one or both of the first two tests.
HIV stages of progression. HIV is staged in three general descriptives: acute HIV infection; chronic HIV infection; and AIDS, which is the most severe infection. Within the earliest stage, acute HIV, an individual will develop HIV infection within two to four weeks of being infected. Some individuals may develop a fever, headache and rash. During this stage, HIV spreads quickly throughout the body and multiplies rapidly. Testing done during this stage will likely show the level of HIV in the blood to be very high with an increased risk of transmission to others. HIV will begin to attack and destroy the CD4 cells.
The chronic HIV infection stage will show HIV continuing to multiply in the body, but at much lower levels. In addition, HIV-related symptoms will also lessen with the patient possibly being asymptomatic. Without treatment, chronic HIV infection will advance to AIDS within 10 years, possibly more or less, depending on the patient. With treatment, individuals may be in this stage for several decades or more. While it’s still possible to transmit HIV to others during this stage, those who are treated exactly as prescribed and maintain an undetectable viral load have little risk of transmitting HIV.
AIDS is the most severe stage of HIV infection. Because HIV has severely damaged the patient’s immune system, the body can’t effectively fight off infections. Once individuals are diagnosed with AIDS, they often have a high viral load and are able to transmit HIV to others very easily. Without treatment, individuals with AIDS typically survive about three years. HIV medicines can and do help people at this stage of HIV infection.
Treatments for HIV. Currently, there’s no cure for HIV. However, treatment with HIV medicines (called antiretroviral therapy (ART)) can slow or prevent HIV from advancing from one stage to the next. Individuals using ART will take a daily combination of medicines called a “treatment regimen.” ART is recommended for everyone who has HIV. Advances in medicine effectively help to keep HIV from multiplying and assist individuals with living much longer and healthier lives. The regimen also reduces the risk of transmission and tries to reduce the viral load to undetectable levels. Individuals with an undetectable viral load have nearly no risk of transmitting HIV.
Underwriting Processing
There are several life insurance companies that will underwrite clients with HIV. While the guidelines do change from time to time, each carrier has its own, although somewhat similar, rules. I’ve compiled the basics for your information. These guidelines are estimates and are for initial discussions only. Due to confidentiality and privacy protection, disclosure rules and regulations and discriminatory concerns, the handling of HIV-related cases are intricate and difficult and should only be handled through a qualified agency. Self-identifying is a specific process that carriers will require for a positive underwriting result. Any case that’s brought forward to a carrier should be thoroughly reviewed and discussed with your agency prior to any actual carrier case submission.
Underwriting Guidelines
The guidelines listed below are a compendium of several carrier stated guidelines. Variations for each carrier may exist:
• The HIV-positive client must be age 20-65 and with a self-admitted diagnosis.
• The client has had one to five years of favorable ART, without lapses or delays in treatment.
• The client must be negative for hepatitis B and C.
• The current and prior 2-year viral loads must be undetectable (< 20 copies/ml).
• The client must have CD4 count of 350 cells/mm3 or higher for two years or more.
An excellent underwriting outcome would be generally Table H (200%-400%) in addition to a potential Flat Extra Rating of $2.00-$2.50 per $1,000 of coverage desired. The minimum face amounts are generally $100,000 to $250,000. The maximum face amounts are usually $2 million to $2.5 million for each carrier, with several carriers offering these amounts. Today, we could likely find coverage for approximately $6.5 million or more, if needed. For more information about life insurance ratings, see “Life Insurance Ratings Explained,” p. 23.
Underwriting Ineligibility
There are several additional health factors that a carrier will consider that could preclude any offer at all. These factors include, but aren’t limited to:
• Newly or recently diagnosed HIV (one year from diagnosis is generally a minimum).
• Documented viral resistance to treatment.
• History of tuberculosis.
• History of intravenous drug abuse, alcohol or polysubstance abuse, diabetes or coronary disease.
• Ratable for low-build malignancy.
Additional factors are considered, such as smoking status, date of diagnosis and current age.
Joint Life/Survivorship
Second-to-die life insurance is also a cost-effective way to provide liquidity for future estate settlement costs, leave behind a bequest or simply provide for children or grandchildren. This coverage is available when an HIV-positive applicant is considered as rated and the non-HIV-related spouse has no HIV-related rating.
Group Life Coverage
Group life insurance may also be available through the HIV-positive client’s employer. It’s possible not to be rated for coverage if this is available. Although the death benefits are usually limited to small amounts or a multiple of salary, everyone should at least investigate these benefits as a cost-effective option.
Additional Options
While difficult to find and limited in terms of benefits, it’s possible to find guaranteed issue, final expense or critical illness coverage to some measure. It’s important to read the fine print and limitations within these policies.
Opportunity to Help
There are many HIV-infected clients who believe that life insurance isn’t an option for them. Our role as advisors is to inform our clients that life insurance coverage isn’t only available, but it might be an efficient solution for their planning needs. We recently placed a large case that protected the client’s company for purposes of key-person and business continuity planning. Without proper coverage, the company and family were looking toward very drastic planning techniques that weren’t what the client ultimately wanted. The life insurance policy solved most of the client’s problems related to his needs and desires for business continuity.
Fortunately, legal counsel was informed enough to call me for help, even though the client was doubtful about obtaining any available coverage. While some clients with HIV won’t find a suitable life insurance option, it would be unfortunate if the opportunity wasn’t at least investigated. Our obligations as advisors include limiting the damage of seen and unforeseen events, offering solutions to certain problems and guiding our clients to make smart decisions.
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