Gay men left in the dark by the insurance charges that dare not speak their name

HIV-positive applicants continue to pay more for cover, despite industry denials that discrimination exists. But reform is on the way, as Emma Lunn discovers

What has it cost to be gay? It might sound a very non-PC question but the issue of sexuality - and in particular, being a gay man - has long affected the gay community's personal finances.

What has it cost to be gay? It might sound a very non-PC question but the issue of sexuality - and in particular, being a gay man - has long affected the gay community's personal finances.

And the answer is: quite a lot, actually. Homosexual men have regularly paid more than most people for "protection" products such as life insurance, critical illness cover and income protection. Much of this higher cost has been down to the perception among insurers that gay men are at greater risk of exposure to the HIV virus, which damages the body's immune system and can lead to Aids.

"When Aids hit the headlines in Britain back in 1987, the insurance industry had a knee-jerk reaction to the HIV epidemic, and premiums were loaded accordingly for people at risk of catching it," says Chris Morgan, managing director of the independent financial adviser (IFA) Compass.

"Today, the industry is much more relaxed about the virus, and drugs therapy means that HIV can be treated effectively in many cases."

Of course, Britain's gay community is not the only one to struggle with HIV. The latest figures show that infection rates are higher among heterosexuals. Today, any of the country's 53,000 carriers can buy income protection and critical illness cover like anybody else usually without being charged higher premiums. The catch is that they won't be able to claim any payout if they suffer an illness related to their HIV-positive status.

Like other policyholders, they can claim only if they're off work because of a condition unrelated to HIV.

Should such a person fall ill abroad - and, for example, need an emergency blood transfusion - the medical costs can be very high, says Ivan Massow of IFA Massow Financial Services.

"The risk is greater and insurers need to reflect this risk," points out Mr Massow, whose company was one of the first in the UK to offer insurance to gay men and people with HIV. "What is often seen as a homophobic attitude [on the part of] insurance companies is just commercial consideration."

In the travel insurance sector, however, there is little consensus among providers when assessing applications from HIV-positive individuals. Research by the broker GoGay.com has revealed big discrepancies in the attitude taken by different companies towards a 29-year-old man with HIV-positive status.

GoGay.com gave each insurer the same information about the man's medical history - including the fact that his anti-retroviral drugs had never failed - and asked for cover for a seven-night trip to Spain.

A number of insurers and brokers quoted higher-than-usual premiums, while others refused cover altogether. In some cases, premiums were not affected at all.

HSBC charged £19 for a week's insurance, while Virgin Money wanted £126. Neither the travel broker Columbus Direct nor the Post Office would offer cover. Endsleigh and Churchill said they would provide it but not for HIV-related claims.

However, in response to the survey, the Post Office denied it had ever refused cover to someone simply because they had HIV, and said applications were assessed on an individual basis. No distinction, it added, was made between HIV and any other pre-existing illness, such as a heart condition.

Virgin Money asks four qualifying questions - including the applicant's age, and whether their drug treatment is still effective - and bases its premium on the responses.

GoGay.com's research also found that most insurers do not recognise same-sex partners as couples, and so don't offer the discounts on joint policies normally enjoyed by married couples (and often by co-habiting heterosexuals).

Jamie Crick, station director at Gaydar Radio, believes the insurance industry does discriminate against the gay community, and says he has experienced this at first hand.

"When I asked why my premium was loaded, the woman on the phone couldn't even say the word 'homosexual'," he recalls. "[As gay men,] we feel discriminated against and don't understand why insurers have a problem, as our lifestyles are not that different to anyone else's.

"I think it's an issue they can jump on to make more money."

But this situation is changing. From September, a statement of best practice on HIV will take effect in the insurance industry, following guidelines drawn up by a working party led by the Association of British Insurers (ABI). "Gay" questions on protection insurance application forms will be outlawed.

Until recently, many forms requested general lifestyle information from applicants. Anyone ticking the "gay" or "bisexual" box was likely to see their premium increased by the insurer, whether or not they were HIV positive.

Mr Morgan of Compass is part of the group working with the ABI on the new guidelines.

"Instead of being asked about their sexuality, people will be asked if they belong to a high-risk group for HIV - ie, being homosexual, bisexual or an intravenous drug user - and there will then be common HIV questions relating to all these risk groups."

Despite such moves to fight discrimination, it remains impossible to get life assurance if you are HIV positive. Insurers still calculate that the condition carries a high risk of early death. But in the case of individuals who take out insurance after testing negative, and later die HIV-positive, policies should pay out as long as they have told the insurer about their sexuality and HIV status at the time the cover was first purchased.

Contacts: www.pinkfinance.com; www.compassifa.co.uk; www.massow.co.uk