By Aubrey Cohen
Prudential Financial, one of the nation’s largest insurance companies, has started offering life insurance to people with HIV, the company announced Tuesday, on World AIDS Day.
Previously, people living with HIV and AIDS have had very limited options for life insurance — mainly group coverage through employers. Prudential’s new offering is the first to be publicly announced by a major American insurer, according to Kaiser Health News.
“With advances in the successful treatment of people with HIV, we are now able to offer this population the opportunity to apply for life insurance — a milestone we see as a significant step in the right direction,” Mike McFarland, chief underwriting officer for Prudential Individual Life Insurance, said in a news release.
About 1.2 million Americans were living with HIV at the end of 2012, according to the most recent data from the Centers for Disease Control and Prevention. About 50,000 Americans become infected each year.
“I’m very excited,” Aaron Baldwin, a San Francisco life insurance agent who is HIV-positive, told NerdWallet. “I think it is the right time.”
The main life insurance option up to this time for people living with HIV has been group coverage, generally through an employer, according to Baldwin. But that tends to have limits that are well below the coverage most people need and often is not able to be continued after leaving that job.
Some smaller, high-risk insurers also offer policies, typically at three to five times what a healthy person would pay, according to Trusted Choice, a trade group for independent insurance agents.
Although HIV was once considered virtually a death sentence, advances in treatment mean that people who follow medical protocols can live a normal life span after infection, Baldwin noted. Until recently, insurers saw people with HIV as being too much of a risk, Steven Weisbart told NerdWallet; Weisbart is senior vice president and chief economist for the Insurance Information Institute, an industry group.
Prudential is providing the coverage in partnership with ÆQUALIS, a company focused on offering financial services to people living with HIV. It said people with HIV are eligible for 10- and 15-year term life insurance policies, provided they meet underwriting qualifications. The policies will be convertible, meaning customers can convert them to permanent, lifelong coverage.
If Prudential has a good experience with these limited choices, the company might offer its full range of products to people with HIV in five to 10 years, Weisbart predicted. “This is something that I think they’re going to try out in part to see how the market responds.” Other insurers may soon follow, depending on Prudential’s success, he added.
Prudential directed interested consumers to the ÆQUALIS website. Pricing information was not immediately available. Weisbart said he expects some people with HIV will have health issues that disqualify them from coverage or boost the price of policies.
Prudential is the nation’s No. 4 life insurance company, with $6.3 billion in individual direct life insurance premiums last year, according to the American Council of Life Insurers.
Baldwin, who started a financial-planning program aimed at people with HIV at New York Life in 2013, expects other companies to follow Prudential’s lead.
“I can’t see why not. I’ve already heard rumblings,” Baldwin said. “This is a marketplace that somebody needs to pay attention to, because these people can’t simply go into their golden years completely vulnerable.”
[Life insurance quotes are available through NerdWallet’s Life Insurance Comparison Tool.]
Aubrey Cohen is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @aubreycohen.
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