Important note: Information in this article was accurate in 2007. The state of the art may have changed since the publication date.
South African Press Association - March 27, 2007
Insurance companies belonging to LOA will no longer apply the HIV/Aids exclusion clause to life and disability policies.
The exclusion clause meant that no claims were paid out if a person with a life policy died of Aids, regardless of whether their premiums were up to date.
LOA chief executive officer Gerhard Joubert said although this was not binding, all LOA members had agreed to waive the exclusion.
LOA represents 95% of major insurance companies in South Africa.
"Any claim for a lump-sum death or disability benefit will not be denied by life companies based on the HIV/Aids status of the insured person, unless the policy holder is found guilty of material non-disclosure," he said.
The exclusion clause will be waived for all types of life and disability cover that pay lump-sum benefits, including group life, credit life and funeral cover.
However, the waiving of the exclusion will not apply to hospital cash plans, policies requiring regular re-testing and cases where policy holders committed material non-disclosure.
Fatima Hassan of the Aids Law Project said the announcement by LOA was "totally groundbreaking", one of the biggest moves the life industry has ever made.
"This will potentially lessen the socio-economic impact on families who lose a breadwinner to Aids," she said.
Practices and policies of non-LOA members who still continue to sell policies containing the Aids exclusion clause are worrying.
"We will be taking up the matter with the Financial Services Board and the government," she said.
The limited availability and unaffordable rates for insurance packages of people with HIV/Aids is also a area of concern.
Convenor of the LOA medical and underwriting committee Dr Pieter Coetzer said although cover options for HIV-infected people are expensive, some life insurers are in the process of developing new-generation products that will offer competitive premiums for HIV people.
There are only five products on the market available to people who know their HIV status or who test positive in the application process of life insurance.
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