Life insurance is an important form of cover which pays out a lump sum in the event of death or diagnosis of terminal illness.
It can help to protect a family if the insured person’s death would leave them without the main earner in the household. In trying times, it may be used to give some form of protection against debt, such as a mortgage, which the survivors of the insured person would have otherwise had difficulty paying. It is also sometimes used by this insured person to leave a legacy after they’re gone, helping their family to reach higher financial aspirations.
As each of the above scenarios suggest, life insurance can help individuals in all walks of life. For this reason, it should be a type of cover considered by all, yet misconceptions still remain about how a person’s lifestyle will affect their life insurance quotes and their treatment by underwriters. In this instance, we look at sexual orientation.
The 5 main HIV infection routes, as identified by insurers:
- Unprotected sex
- Transmission from mother to baby
- Use of non-prescription intravenous drugs
- Residence in or travel to or from countries with high HIV prevalence
- Blood transfusions, use of blood products, or surgery, outside the EU
Pre-2005 & HIV
Not much more than 10 years ago, it was common practice for insurers to single out gay men in asking them their number of sexual partners and whether they had always practised safe sex, due to concerns over the risk of HIV. Whilst the utility of this to the insurer for calculating risk seems obvious, this was seen by many as gross discrimination, and a large roadblock to gay men looking for insurance cover. What this also showed on the part of the insurers was a skewed understanding of HIV and its prevalence; for people aged 15-59 in the UK, the rate of HIV infection in black-African heterosexuals is 56 per 1,000 (GOV 2014), comparable to the 59 per 1,000 of men-seeking-men (the definition used by many governing bodies to encompass both gay and bisexual men).
Since 2005, however, guidelines constructed by the Association of British Insurers have been in place to prevent firms from discriminating against customers in such a way. These rules have meant that insurers cannot ask you directly about your sexual orientation, and cannot therefore use different methods of underwriting based on this. More than just respecting the privacy and freedom of customers, these steps have been in place to improve access to protection in the gay community and help these customers feel more accepted.
Insurers are now directed to carry out underwriting of clients using clear questions which do not rely on inference or assumptions. An example of where inference may have led to discrimination in the past appears in ABI’s 2008 Statement of Best Practice for HIV and Insurance, where they stated that insurers “must not differentiate between customers in civil partnerships and married couples when setting HIV testing limits”. This may no longer be a major concern now that same-sex couples also have the right to marry, but this guideline does speak volumes of the level of inference made by insurers that ABI was trying to stamp out.
Getting Life Insurance Quotes: Questions you may encounter
As found in their 2008 statement, the ABI now recommends using such questions as “Have you ever tested positive for HIV, Hepatitis B or C, or are you awaiting the results of such a test?”. This may also be found supplemented by questions on your exposure to the risk of HIV, with examples such as through unsafe sex, intravenous drug abuse, blood transfusions or surgery undertaken outside the EU. This style of questioning effectively takes the matters of gender and orientation out of the picture, and helps the underwriter to determine whether or not you should take an HIV test as part of your medical assessment.
Common Law Partnerships
The acronym LTAHAW (Living Together as Husband and Wife) is slightly inaccurate in this instance, but the way it’s used to define the seriousness of a relationship – be it a heterosexual or homosexual relationship – is important, as it helps to mark the individuals as different to legally ‘single’. Whilst this is not defined in legislation, HMRC use the following criteria on which to judge a relationship:
- If the individuals are living in the same household
- The stability of the relationship
- Mutual financial support
- Any dependent children
- Public acknowledgement
Other circumstances in which this may be necessary include if you’ve been diagnosed with a sexually-transmitted disease that has long-term health implications. The reasoning behind this is that such a diagnosis suggests that you may have been at risk of exposure to HIV in the past.
If you apply for a particularly large amount of insurance then you’ll also very likely have to take a HIV test. What constitutes a ‘large’ amount is dependent on your marital status -if you’re in a common law partnership (see LTAHAW), marriage or civil partnership, the limit at and above which your application will require a HIV test is £1,000,000. However, for single males, this is more likely to be around £300,000 because of this group’s greater risk to HIV or Aids.
So contrary to what some may still believe, sexual orientation will not affect your life insurances application or the quotes you receive.
Marital status and gender, on the other hand, will play a part, and if you’re a single male then don’t be put off if the insurer asks you to take a HIV test. Keep in mind that this test will only affect your quotes if you come back as positive – any negative test will not have any effect and are just part of the insurer’s standard process.