Life assurers drop demands for HIV tests on gay clients

Two years on, 32-year- old Paul Bell can barely mask the anger he feels at his treatment by Legal & General when he applied for a life policy.

Two years on, 32-year- old Paul Bell can barely mask the anger he feels at his treatment by Legal & General when he applied for a life policy.

In June, 2001, Mr Bell, a local government officer who is gay, needed only £74,000 of cover to protect the mortgage on his new home in Atherstone, Warwickshire. But he was shocked when he was asked to go for a medical involving an HIV test, and fill in an extensive questionnaire which requested details of his sex life.

Life assurance applicants who are not gay and are in reasonable health are not normally required to undergo medical examinations or to complete lifestyle questionnaires unless they are seeking cover of at least £250,000.

Mr Bell says: "It was none of their business, and I found it offensive and unreasonable because I am no more of a financial risk than any heterosexual person. My sexuality doesn't define me as a human being, it just happens to be the way I'm born, and the make-up of my genes. I think the society we live in is doing quite well in accepting gays, but the financial services industry seems to be among the last bastions of discrimination."

He was so incensed he refused to take his application to Legal & General further. Instead he turned for advice to the national low-cost intermediary LifeSearch, which was able to arrange him a policy with Norwich Union at standard rates within two days.

Mr Bell's plight should become rarer after this week's Queen's Speech foreshadowed the introduction of a Civil Partnership Bill giving homosexuals similar legal rights to married couples. The Bill has radical implications for the financial position of gay couples, allowing them to benefit from a dead partner's pension, granting next-of-kin rights in hospitals and exempting them from inheritance tax on a partner's home.

The deputy minister for women and equality, Jacqui Smith, says: "Same-sex couples have been invisible in the eyes of the law for too long. The right to be treated equally and fairly is fundamental. It is the foundation upon which everything else depends and allows individuals to pursue the other aspects of their lives."

Mr Bell's 24-year, level-term assurance policy from Norwich Union, with a critical illness add-on, provides him with £74,000 of cover for £15.25 a month. No medical was required and the application form involved only straightforward questions. Fortunately, Legal & General, which had become known for taking an unusually harsh attitude towards gay risks, has now adopted a more relaxed stance, using similar underwriting procedures for gays as for all other applicants.

But the gay community continues to buzz with anecdotes about other insurers who insist that gay men seeking life cover go for HIV tests. In some cases they also require them to complete intrusive questionnaires; in others they get the doctor supervising the medical examination to ask personal questions. Applicants can then get premium loadings of at least 50 per cent even if there is no evidence of HIV risk.

This is considered unreasonable because HIV is now nearly as great a problem for the heterosexual community as it is for homosexuals. The Health Protection Agency's latest survey of prevalent HIV infections shows that 30,281 people in England, Wales and Northern Ireland were diagnosed for HIV-related care in 2002. The probable route of infection for 13,976 of these is considered to be sex between men and the probable route for a further 12,501, sex between men and women.

Some insurers are even reputed to ask gays for personal information on health insurance products such as critical illness cover and income protection. This practice seems unnecessary and absurd because, unlike life insurance, these policies almost always exclude from cover HIV-related illnesses caused by sexual activity. But, thanks to a consultation process that began last month, such examples could soon end.

The Association of British Insurers (ABI) is consulting on proposals to update the way insurance companies treat applications for life cover and health insurance where HIV may be an issue. It is preparing a new statement of best practice for HIV that will enable insurers to assess all applications fairly, on the basis of relevant and accurate information, without intrusive or inappropriate questioning (see Box 1).

Richard Walsh, head of health at the ABI, says: "The whole area of medical techniques is changing and we want to be as fair as possible. Our original statement of best practice introduced in 1997 was designed to treat gays in a fair way and to restrict insurers to asking them questions that were relevant. But now the criteria that determine relevance may be different because of advances in technology and medical predictions about the outcome of Aids. That is perceived to be less of a risk than it used to be but it is still a risk and one which insurance companies must be able to assess. The important thing is that their underwriting should reflect the most up-to-date thinking." With the consultation process not expected until the end of December, the new Statement is unlikely to materialise until the spring.

But until then, gays who buy life insurance can do much to prevent themselves becoming the subject of discrimination by using a specialist intermediary or an independent financial adviser (IFA) who focuses on a gay clientele, as opposed to buying from a single insurer who sells directly to the public.

Ivan Massow, chief executive of the Ivan Massow Group, a national IFA which specialises in financial planning for gay people, says: "The threat of discrimination and prejudice is undoubtedly amplified assurers and other direct-selling providers who cherry-pick their risks. If people go to an intermediary there should be less of a problem."

Most policies recommended by specialist intermediaries will come from a small number of highly competitive insurers: Legal & General, Norwich Union, Scottish Provident, Friends Provident, Scottish Equitable Protect, Scottish Widows and Liverpool Victoria.

Most of these insurers also do not discriminate between gay men and standard risks. Indeed, since Legal & General changed its stance, the only one to do so is Liverpool Victoria, which automatically asks any man who indicates he is gay to have a medical and HIV test. It also writes to all of them asking whether they are in a stable relationship, whether they practice safe sex and whether they are promiscuous.