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Loa's decision to do away with HIV/AIDS exclusion clause

Posted  April 23, 2007

According to an official release issued by the Life Officers Association (LOA), from the beginning of April, insurance companies who are members of the LOA will no longer apply existing HIV/Aids exclusions to life and disability policies.

Statistics from the African Medical Research Foundation (AMREF) show that South Africa has one of the highest HIV prevalence rates on the planet, with over 20% of the population aged between 15 and 49 having been diagnosed as HIV positive.

With these statistics in mind, the decision to no longer apply the HIV/Aids exclusion clause to life and disability policies is a welcome one as it means that dependants who lose family members to HIV/Aids will be compensated. However, many feel that the LOA's decision was long overdue.

According to Lenerd Louw, CEO of 1Lifedirect, South Africa's first fully direct life insurance provider: "We decided not to adhere to the outdated and somewhat conservative exclusion clause long before the LOA made it a requirement. We are very pleased to see that the rest of the industry is playing catch-up. This bold announcement is belated but ultimately, is a positive step towards the transformation of the much criticised life insurance industry."

"One of the reasons we decided not to include this clause in our policies was that it would further stigmatise an already over-stigmatised disease," said Louw.

Louw points out that life insurance companies have never excluded cancer, or heart attacks from policies, so why should they exclude HIV/Aids? HIV/Aids is a dread disease just like any other.

"When we launched we decided that our offering would be totally different to anything else on offer. We vowed to be a refreshing alternative to traditional life insurance channels as we felt that there was a lack of consumer confidence in the industry. Two years ago already, the Aids/HIV exclusion clause was frowned upon and it didn't make sense to include it in our policies," concludes Louw.

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