Life insurance for HIV patients - Do such policies exist?

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PostPosted: Thu Jun 04, 2009 7:13 pm   Post subject: Life insurance for HIV patients - Do such policies exist?  

What is the availability of life insurance for hiv patients? Are there any other Life Insurance companies that will insure people with HIV? Please advise.



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PostPosted: Fri Jun 05, 2009 9:36 am   Post subject:   

Life insurance companies might offer life insurance for hiv patients but it would depend upon several factors. Normally they would be required to pay higher amount than standard life rates. However,



Quote:
Are there any other Life Insurance companies that will insure people with HIV? Please advise.




What do you mean by any other insurance company? Have you been contacted by any insurer/agent for life policy?
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PostPosted: Fri Jun 05, 2009 11:48 am   Post subject: No underwritten policies for hiv patients  

No life insurance company will issue underwritten life insurance for hiv patients now. There may be companies that have guaranteed-issue policies for small amounts like $10,000, but they are graded (no death benefit if you die in the first two years) and are extremely expensive.

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PostPosted: Fri Jun 05, 2009 12:26 pm   Post subject:   

Quote:
No life insurance company will issue an underwritten policy on someone who has HIV. There may be companies that have guaranteed-issue policies for small amounts like $10,000, but they are graded (no death benefit if you die in the first two years) and are extremely expensive.




He can actually probably get $50,000. The death benefit is a return of premium compounded at 5% with such life insurance for hiv patients (for the first 2 years).



"Expensive" is in the eye of the beholder. The policy is very expensive for someone who is healthy. For someone who expects to die within a few years, it's incredibly cheap.
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PostPosted: Fri Jun 05, 2009 12:35 pm   Post subject:   

Quote:
He can actually probably get $50,000. The death benefit is a return of premium compounded at 5% with such life insurance for hiv patients (for the first 2 years).



"Expensive" is in the eye of the beholder. The policy is very expensive for someone who is healthy. For someone who expects to die within a few years, it's incredibly cheap.






Usually if you don't die between the beginning of year 3 and the end of year 6 on a graded policy, you'll lose that gamble. Die in year 1 or 2 and you only get your premium back plus some interest. Die in year 7 and you've already paid up your entire death benefit.



True story - we had a client who had a $25k graded death benefit policy who died last year......she died on the last day of the second year of the policy, so only the premium + interest was returned. If she had lived another 12 hours or so, the family would have gotten an extra ~$18,000.
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PostPosted: Fri Jun 05, 2009 1:09 pm   Post subject:   

I looked at these life insurance for hiv patients twice in the last year. Once was for a person who needed a heart transplant. Once for someone with a disease that I can't remember.



In both of these cases, it was going to take them living a dozen years or more to lose the gamble.



It sounds like you are looking at a very expensive graded death benefit policy. The policy that you are describing would be 3-4K for $25,000. Unless my memory is wrong, I recall 4K being the price for $50,000.

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PostPosted: Fri Jun 05, 2009 1:14 pm   Post subject:   

The premiums you're referring to may be based on age....I believe she was paying around $300/month for $25k of coverage (she had cancer). We didn't write the policy though, so I don't know all the specifics.

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PostPosted: Fri Jun 05, 2009 1:25 pm   Post subject:   

So, the bottom line for the original poster is that "yes" life insurance for hiv patients can be purchased, but it may or may not be at a price that makes it worthwhile.



For a young, relatively healthy person with HIV, it probably is too expensive. If the person isn't healthy, or has full blown AIDs, it probably does make sense.

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PostPosted: Fri Jun 05, 2009 5:24 pm   Post subject: high premium, low benefits  

Quote:
Are there any other Life Insurance companies that will insure people with HIV?


Yes.



Guaranteed Acceptance Life Insurance

MODIFIED BENEFIT WHOLE LIFE



VERY HIGH premium, very LOW benefit.



With life insurance for hiv patients the insurance company can legally rob you by having you screw yourself. You need to die on the first day of the beginning of the third policy year OR die by accident the day after the policy is issued.



NO AGENT WILL CALL YOU.



You get to buy this all by yourself!



Simply "Google" Guaranteed Acceptance Life Insurance


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PostPosted: Fri Jun 05, 2009 7:56 pm   Post subject:   

Gary, tell us how you really feel.



I've looked into this a few times and it is a great deal for somebody who is dying. Like most products, life insurance for hiv patients isn't good or bad. It's appropriate or inappropriate based upon the situation.



Here's an example. Joe can get $50,000 of coverage for $5,000 a year. He has cancer and a realistic guess on his life expectancy is 18-36 months.



If he dies within 24 months, his family will get an after tax guaranteed return of 5%. That isn't bad.



If he lives 6 years, it works out to be a 15% compound return. If he dies between 2 and 6 years, it will be much higher.



These policies are a great deal for people who are actually dying, but not good for people who aren't dying, but are simply unhealthy.



Another way to put that is that it may not be a good policy for somebody with HIV, but the second that it turns into AIDs, it's time to buy.

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PostPosted: Fri Jun 05, 2009 8:58 pm   Post subject:   

Dear Insurance Expert,



Only an insurance agent would know what it was that you just wrote.



Please correct me if I have my wires crossed:



This means:

Quote:
Here's an example. Joe can get $50,000 of coverage for $5,000 a year. He has cancer and a realistic guess on his life expectancy is 18-36 months.



If he dies within 24 months, his family will get an after tax guaranteed return of 5%. That isn't bad.


If he dies in 24 months the death benefit is $10,500, correct? To say he has $50,000 of coverage is not accurate.



How is this "life insurance"?



The death benefit is simply the return of premiums paid with interest. If he put the money in a fixed annuity paying a 10% premium bonus and 2% interest, at the end of two years the death benefit would be $11,444.40.



EVEN after taxes in a 28% tax bracket the beneficiary still clears $11,040.



Now I'm sorry....but when the death benefit of a fixed annuity EXCEEDS what a life insurance policy would provide even after taxes SOMETHING is wrong with the so called life insurance policy.



These policies aren't a good deal for anyone buying the policy. Unless you die by accident the day after the policy is issued OR die on the first day of the 3rd policy year. The longer you live, the worse these polices are and with many of them you can actually pay more in premium than the death benefit will be! Shocked



These polices are sold to desparate people who find themselves in a desparate situation.



Do the math...the insurance company has...they NEVER lose on these policies EVER.


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PostPosted: Fri Jun 05, 2009 10:03 pm   Post subject:   

Quote:
If he dies in 24 months the death benefit is $10,500, correct? To say he has $50,000 of coverage is not accurate.




First of all, your math is not correct. It would be $10,763. Secondly, Since he lived for 24 months, he would get $50,000.



Quote:
Do the math...the insurance company has...they NEVER lose on these policies EVER.




Gary, I already did the math for you. If he lives for less than 2 years, it is a 5% return. If he lives for between 2 and 6 years, it is a return of greater than 15%.



Insurance companies lose money on these policies all of the time. It's no different than any other life insurance. They lose money on lots of policies. They just don't lose in the aggregate. How do they make money on these policies? They are purchased by both unhealthy people who aren't dying and by dying people. In general, they make money on their unhealthy people. They lose money on their dying people. If only dying people bought the policies, the premiums would have to be much higher.



Please go back to my example and tell me why this is such a bad idea for someone who is supposed to live no longer than 36 months? Barring a miracle, my client will end up with somewhere between a 5 and 40% return.
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PostPosted: Sat Jun 06, 2009 9:19 am   Post subject:   

Why would an insurance company write life insurance for hiv patients at all if the risk is so high?


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PostPosted: Sat Jun 06, 2009 1:52 pm   Post subject:   

Razz I sense a THREAD WAR brewing around life insurance for hiv patients over here!!! Wink



For the General Public who read may this thread there isn't any right or wrong to Guaranteed Acceptance Life Insurance MODIFIED BENEFIT WHOLE LIFE.



This is just insurance agent difference in opinion between myself and Insurance Expert.

Quote:
First of all, your math is not correct. It would be $10,763. Secondly, Since he lived for 24 months, he would get $50,000.


Okay, fine, almost, but let's be exactly correct.

Correct me if I'm wrong...in your $5,000 premium per year, $50,000 Guaranteed Acceptance Life Insurance MODIFIED BENEFIT WHOLE LIFE example.



If the person dies within the first two years the death benefit is limited to the return of premium PLUS 5% interest compounded annually.

Correct?



If they should beat the odds and be so fortunate as to die in the 25th month, the beginning of the third policy year they won, they beat the odds and the company pays out $50,000.

Correct?



OR if the person dies by accident the company pays the $50,000 from day one.

Correct?



Side bar:

Quote:
Why would an insurance company write a policy at all where the risk is so high?


Math.



If a person is buying an individual life insurance policy WITHOUT submitting evidence of insurability, that very fact tells them you are HIGH RISK. For the very highest risk the company is simply giving you your money back plus interest. You could have actually had more money for your beneficiary during the first two years by buying a Fixed Annuity, 10% premium bonus contract, at MINIMUM 2% interest.



Now if you make it two years you're NOT that sick yet still uninsurable and will probably make it 10 years at which point your beneficiary is simply getting a return of the premium paid.



Now beyond 10 years, these Guaranteed Acceptance Life Insurance MODIFIED BENEFIT WHOLE LIFE policies, become a black hole.



You can actually pay more in premium than the death benefit. That NEVER happens with fully medically underwritten life insurance unless you attempt to keep term insurance past about age 80 which NEVER happens because it is simply cost prohibitive.



Let me tell you a true story and I'll name names.



My Mom bought a garbage Colonial Penn Guaranteed Acceptance Life Insurance MODIFIED BENEFIT WHOLE LIFE policy because Ed McMahon was the celebrity spokes person.



Premium was about $20 per month ($240 per year) for a $2,500 death benefit. She paid on that policy for 15 years.



15 years of premium times $240 per year equals $3,600 paid in premium and at the time of her death the death benefit BECAUSE of her own cash in the policy plus minimum interest was about $2,700.



That's $900 hundred dollars less in death benefit than the premium paid.



That's NOT life insurance.

That's a mathematical game disguised as life insurance.



Arrow Allow me to quote myself... Cool

Guaranteed Acceptance Life Insurance MODIFIED BENEFIT WHOLE LIFE

Quote:
This is a form of life insurance whereby the insurance company can legally rob you by having you screw yourself. You need to die on the first day of the beginning of the third policy year OR die by accident the day after the policy is issued.




Just like ALL millionaires in the USA need to die on December 31st 2010 to escape the massive 55% top Federal Estate Tax rate that will be imposed on January 1st 2011.



Very Happy Oh,... and make sure the wife croaks too...it's real bad tax wise if she makes it past December 31st 2010! Shocked



....and now that I'm in FULL rant mode does anyone understand that 50% of the population of the USA supports 100% of the government AND the "other" 50% of the population...


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PostPosted: Sat Jun 06, 2009 8:18 pm   Post subject:   

Gary, sorry, but I think once again, this isn't going to be an issue to have a thread war. I think that we probably agree on this issue. I believe that guaranteed issue life insurance is usually a pretty bad deal.



It's just that about once a year, I come across a case in which it makes sense.

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