Most people glaze over at the mere mention
of pensions and life insurance. But wise moves now can ensure a brighter financial
future for people living with HIV, says Louis Letourneau
It’s all too easy to put finances on the back
burner when you’re diagnosed HIV positive. I know lots of people who’ve
decided to live now and forget about tomorrow. They’ve lived beyond
their means and accumulated a mountain of debt over the years. And who can
blame them? It’s only money, after all.
But when you owe the bank, the mortgage lender, the credit card companies
and everybody else, worrying about the bailiffs can have a very negative effect
on your health. So it pays to keep an eye on financial matters.
Pensions: more valuable than you think
Start by taking stock. First look at the benefits you receive from your employer.
Are you a member of the pension scheme? This is a valuable benefit. Have a
look at the rules. Hopefully, you will continue to work normally, but if you
have to retire early because of ill health, you may find your employer’s
pension scheme will make generous payments to you.
If you have a personal or stakeholder pension, different rules apply but it
may be possible to get an increased payout on the basis of your condition.
An independent financial adviser can help you assess the situation. You need
to be particularly careful if you have very old pension policies, as these
may not pay out the full value to your partner on death. It may, however,
be a straightforward matter to transfer the benefits to a policy that does.
Ways to protect you and your partner
Your work pension scheme may also offer life insurance; often called ‘death
in service benefits’ in this context. This is valuable, as it is the
only kind of life or health-based insurance you will be able to get after
you are diagnosed. Of course, it has its limitations, as it will only protect
you for as long as you continue to work for that employer, but it is valuable
nonetheless. Ensure it goes to your partner in the event of your death by
nominating him to receive it. Your human resources department will be able
to provide a form for you to do this.
Under current underwriting rules, it will not be possible for you to get more
life insurance after you are diagnosed, contrary to what other people claim.
This does not mean that you can’t get a mortgage - you can. Most mortgage
lenders (with the exception of the big banks) no longer insist on life cover.
But it does mean your partner is unprotected should you die and may be forced
to sell the property.
Unfortunately, there is little you can do about that except to try to pay
off the loan as quickly as possible and build up some savings. ISAs (Individual
Savings Accounts) that come in two types, cash and equity-based, are ideal
for this purpose, as they are tax-efficient. For people who are reliant on
benefits, it is important that any savings do not jeopardise the availability
of means-tested benefits.
Challenging discrimination
If you or your partner are HIV negative, you can normally get life insurance.
However, the way life insurance companies underwrite these policies is continually
changing. Unfortunately, gay men are systematically discriminated against
by this industry and things are not improving. It is important to consult
an expert independent financial adviser in this field.
The good news is the Association of British Insurers will shortly release
some best practice on the issue of HIV and life insurance. But we will have
to wait and see if some of the discrimination is lifted. Watch out for a group
of financial experts (including me) who have recently got together under the
banner of Pride Finance, to police companies that do not follow these new
guidelines. The group will name and shame the worst offenders. This is such
an important issue for couples and it should not be overlooked. Several times
I have seen the surviving partner in a couple to be the one who is HIV positive.
The partner who could have got life insurance didn’t bother. Many people
living with HIV have drastically improved their quality of life and may now
live almost normally until their old age. Somehow, the life insurance industry
has not got around this reality.
What else can you do?
For a start, make a will. This applies to you if you are HIV positive or negative.
We are all going to get there. That way you can at least protect your partner,
if you have one.
If you die without a will, your assets will go to your relatives on your death.
With a will, you make sure that they go instead to the people you wish to
benefit. I’ve heard too many stories about people dying intestate (without
a will) and having their relatives come in and take everything, leaving the
partner with nothing. You like to think your relatives won’t behave
that way but can you be sure?
It’s especially important if you own property together to make sure
that your partner inherits your interest on your death. You may have a life
insurance policy to protect your mortgage but would it go to your partner
on your death or would it go to your relatives? Another way of ensuring that
the proceeds of life insurance and pension policies go to your partner is
to put them ‘under trust’ - your financial adviser can arrange
that for you. It is easy to do and costs nothing.
If you and your partner are having wills drawn up, you should also ask your
solicitor to arrange Enduring Powers of Attorney for each of you at the same
time. This means that if one of you became incapable of dealing with your
finances, the other could make decisions on their behalf.
Finance matters are often the last thing on your mind when you are out enjoying
life. Times have changed and people living with HIV often outlive many others.
The same straightforward financial planning is important for everyone. Once
you’ve dealt with this, trust me, you will feel much better. By taking
control of your finances, rather than being controlled by them, you will feel
more in control of your life generally, more confident and less stressed and
that can only be good for your health.
Louis Letourneau www.gayfinance.info
08000 196069.
postbox@gayfinance.info
