Life Insurance For HIV Patients Contingent On Treatment Compliance

01-10-2007 | Categories:



Aids causes life insurers to take stock
by Mariette le Roux. Mail&Guardian Online. 28 December 2006


This newspaper article reports on South African insurance companies that offer life insurance to HIV-positive individuals at prices that are significantly more affordable than traditional costs contingent upon adherence to a treatment program.

This innovation is summarized in this excerpt:

Average life expectancy in the country has dropped 13 years since 1990 to 51. The handful of established South African insurers that offer full life cover to HIV-positive people charged rates up to nine times those of standard policies, but pay out regardless of whether the client was on ARV treatment. Now new products offered by companies like AllLife and AltRisk, a subsidiary of Hollard, charge rates only about four times higher than standard life cover. In return, however, the policies require adherence to an appropriate treatment regime. “Over the past decade, vast improvements have taken place in the treatment of HIV/Aids,” said the Life Offices’ Association of South Africa, a grouping of long-term insurance companies. “Provided there is full compliance with ARV prescriptions it is now considered a chronic treatable disease,” it said in a written response to queries. “Therefore, some life insurers are in the process of developing new-generation products that will offer competitive premiums for HIV positive people on an ARV programme.”

The link to treatment compliance is clearly delineated: “Clients have to commit to treatment once their CD4 count (a measurement of the strength of the immune system) falls below 200, with the company monitoring and encouraging adherence. Defaulters have their cover slashed. ‘Unlike traditional insurance companies, your history is almost irrelevant to us. It is how you are going to behave in the future that is important. We tell you exactly what you must do to live a long life,’ said [AllLife co-founder and managing director Ross Beerman].”

Commentary

While the availability of limited amounts of life insurance is hardly a panacea, the alignment of lower premiums and adherence, based on market forces rather than charity, provides a heartening model of compliance enhancement. Following the results of this naturalistic experiment should be enlightening.


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