Life Insurance Pricing Just Not Fair?

I was running life insurance quotes for a client who is HIV positive yesterday. We went through all the questions about when he was diagnosed, the RNA and CD4 levels when he was diagnosed and the fact that his viral load has been undetectable since starting on antiretroviral drugs and that his CD4 is right where it should be. A poster child candidate to meet the qualifications for a product that wasn’t even available 6 months ago to someone HIV+. 6 months ago the only thing he could have purchased would have been $50,000 of guaranteed issue life insurance for about $2400 a year. He wouldn’t have had a death benefit in the first two years and within 20 years he would have paid his own death benefit.

The quote I provided was for $250,000 of no lapse guarantee universal life for $2400 a year. It had an immediate death benefit and he couldn’t possibly live long enough to pay his own death benefit. Cheap? No, although he did say it seemed extremely expensive. Unfair was what he called it, like I was picking on his HIV+ diagnosis. This was a guy who was all proud about being able to get life insurance for his husband and their new 7 month old child, but only if he could get cheap term life insurance prices. Otherwise it was unfair. His doctor said he could expect to live a normal life span so who was the life insurance company, the only one out of all of the traditional companies that will even offer life insurance to HIV positive clients, to corner him into buying only permanent products. Completely unfair.

So then their is my opinion. Unfair is when a type 1 diabetic wants life insurance and can’t find an agent that represents the 10 or so companies that will approve her at reasonable rates. Unfair is when a person who has had life insurance through their workplace to protect their family for 30 years suddenly doesn’t have that benefit anymore. Unfair is when HIV+ life insurance is underwritten before children who have anything that might place them outside a standard rate class. Unfair is being able to be approved for HIV+ life insurance before the long term effects of the antiretroviral drugs is known. Being turned down for life insurance because of the drugs people take for their impairments isn’t that unusual, but it’s because they’ve been studied and the long term effects are almost as damaging, if not more so, than the disease.

This is a man who wants the whole world to suddenly overcompensate for what he perceives as past unfairness. A year ago he wasn’t able to marry another man. The law says that is fair and bam, he gets it. Life insurance isn’t required by law to be fair. For the good of the entire base of customers they have latitude to decide who can get what products and at what price.

Bottom line. Personally I believe it is extremely fair that the very best HIV+ candidates can get life insurance at amazingly better prices than they could six months ago. Here is a guy with a husband and a son who doesn’t want to purchase life insurance because it isn’t the price he expected. Is that fair to his spouse and his son? If you have questions or would like to discuss unfair pricing, call or email me directly. My name is Ed Hinerman. Let’s talk.