Aids Raises Insurer Concern, Costs

February 20, 1989|By Jane Bryant Quinn, Washington Post Writers Group.

AIDS, or the fear of it, may raise the price you pay for life insurance. The industry`s dread of this disease is touching people with other kinds of illnesses.

Most insurers now require blood tests from anyone applying for at least $100,000 worth of coverage-and sometimes for policies as small as $50,000. Formerly, testing generally wasn`t used unless you wanted coverage of $250,000 or more.

Initially, AIDS was the target-but why stop there? The companies started checking for other diseases as well.

And, sure enough, they found them. Blood tests disclose how well the liver works, which can catch problem drinkers who haven`t admitted to their habit. Diabetes might turn up. Insurers also are checking cholesterol levels, to judge the risk of heart disease.

In short, some people who might once have been considered in average health-and charged standard rates for their insurance-are being spotted as health risks and charged more.

The minimal medical routine also includes a urine test. Insurers use it to check for cocaine and other drugs. A urine test also can expose a smoker who claimed, on his application, to have kicked the habit.

Except for hard-drug users, most poor health risks are insurable. You can buy a regular policy as long as your probable life span is at least seven years. You will, however, have to pay more for the coverage. Here`s how to find the best rate:

- Look for trade or professional groups you can join that write small insurance policies without requiring health tests or questionnaires.

- Don`t meekly accept a higher premium on an individual policy. Shop around. One company might quote a high price to a person with high blood pressure. Another-believing that the condition is under control-might give that same person a standard rate.

- Ask your agent to work with someone who specializes in placing people who are hard to insure. Among the companies who write policies on higher-risk people: Manhattan National Life based in Cincinnati; Fidelity Bankers Life in Richmond, Va.; and National Fidelity in Dallas.

- If your health has improved, shop around again for coverage. A person who had a stroke five years ago with no further symptoms or recurrence might get a new policy at a standard rate.

- If you can`t get normal coverage, even at a higher price, look at

``guaranteed-issue`` insurance. It`s expensive, but it does the job. The policies fall into two main classes:

1. No Questions Asked. You can buy up to $25,000 in coverage, just by signing a check. But you have to live for a while to collect in full. Some policies merely repay your premium (plus interest) if you die in the first two years. Others pay graded benefits: say, 20 to 30 percent of the death benefit if you die in the first year, 40 to 60 percent in the second year and full payment from the third year on.

One company with a graded policy: Laymen Life of Indianapolis. A 50-year- old man might pay $58 per $1,000 of whole-life coverage, compared with $14 per $1,000 for a man in good health.

2. Some Questions Asked. You can get up to $100,000 of coverage, if you don`t have AIDS and worked full time for the last six months. But again, you`re paid graded benefits. Full coverage doesn`t take effect until you`ve lasted three years. Old Reliance in Dallas sells this kind of coverage.

- In the past, anyone mortally ill generally has been able to buy credit life insurance. You might, for example, open a home-equity line of credit, borrow the full loan, and insure it. When you die, the insurance company will pay. This is still the rule in nearly 30 states.

But more than 20 states allow insurers to refuse to pay ``deathbed draws.`` Claims might be rejected if the insured person dies within six months, of a condition that was treated in the six months before he took out the policy. You might have to fill in a health questionnaire. Claims can be denied if you don`t mention a significant illness and die in less than two years.