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Louis Letourneau gives some sound advice to gay men who want to take out life insurance.
There's a lot of confusion in the gay community at present about how life insurers treat applications from gay men. That's hardly surprising - the whole area is a minefield. But, on the whole, the situation's getting better, and may get better still if proposals being considered by the Association of British Insurers (ABI) are implemented in the coming months.
If the new proposals are adopted, we can thank gay IFA Chris Morgan, whose tireless campaigning has brought about this review. The Terrence Higgins Trust has also been working closely with the ABI on the proposed guidelines.
The present guidelines used by the industry are 10 years old and seriously out of date. In fact, they feel even older, reflecting the spirit of the 'Aids panic' of the 80s. If a life company knows you are gay, they'll lump you in with haemophiliacs and intravenous drug abusers, and assume that you're at a higher risk of becoming HIV positive than the general population.
You'll have to complete an intrusive 'lifestyle' questionnaire , asking for intimate details of your sex life, and take an HIV test and medical. Even if you pass all those tests satisfactorily, some companies will still double or treble your premium.
Nobody objects to life companies assessing risk, but they are doing it in an insensitive and illogical way. Indeed, you could argue that, with increased cases of people testing positive for HIV among the heterosexual population, especially those from sub-Saharan Africa, they are scrutinising the wrong people.
And as for insensitive, I know of one company that often sends lifestyle questionnaires to applicants who give their occupation as cabin crew, hairdresser or florist - talk about stereotyping.
Another abuse is that most companies will insist on HIV testing for gay men who apply for critical illness or income protection policies, and yet neither of these types of policy would pay on a claim for an HIV/AIDS-related illness. Is that logical?
The new proposals would make the insurance companies' risk assessment more up-to-date and relevant by making safe sexual behaviour, rather than sexuality, the criterion. Every applicant for life insurance, gay or straight, would be asked if they practise safer sex. Applicants for critical illness cover or income protection would not be asked about sexual behaviour, as it's irrelevant.
Coupled with last year's agreement between the ABI and the British Medical Association that doctors should not be asked (or volunteer information) about STIs and negative HIV tests, progress is being made.
It'll be some months before the new guidelines (if approved) are adopted. It's important to remember that, even under the current system, it's normally possible for gay applicants to obtain the cover they need without the indignity of being singled out for questioning and testing. Yes, insurance companies will make you do this if they are aware that you're gay, but some companies don't ask the question. We (and similar advisers specialising in gay finance) can usually find appropriate cover without any need for testing, and on exactly the same terms as would apply for heterosexual applicants.
So, if you need protection, don't be put off applying. If you're arranging a joint mortgage, it's important that you have life insurance to protect the loan and your partner, in case either of you dies before it's paid off. It's also a good idea to put the life policies under trust for each other, especially if you don't have a Will, as the laws of intestacy could mean that the proceeds go to your relatives, rather than to your partner. If you're single, you are unlikely to need life insurance but you may want to consider a critical illness policy that would pay off the loan if you suffered a serious illness, or an income protection policy that would pay a replacement income if you had to stop working because of prolonged ill-health.
But don't arrange these policies through your mortgage adviser, as they don't know how to get the best deal for gay applicants. Every week, I take calls form gay couples who are outraged because they completed the insurance application their mortgage advisers gave them, and have now been asked to take HIV tests. If you are asked to take a test, don't cancel the application - just ignore it and consult a specialist IFA, such as us or Chris Morgan, for advice on what to do next. On no account take the test; if your premiums are increased because of your sexuality, you will always have to declare this on any application you make in the future.
Ninety-nine times out of 100, it's completely unnecessary for you to go through the whole business of completing a lifestyle questionnaire and taking an HIV test. So, my advice is, come to a specialist IFA first, not after you've been invited for testing! The life insurance mark et is a minefield for gay men but a specialist adviser will know how to navigate it safely, and with the minimum of hassle.
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