The Story Behind the First-Ever Life Insurance Coverage for People With HIV

Andrew Terrell (left) and Bill Grant of Æqualis

Few generational shifts have been more pronounced than the one we are now experiencing regarding HIV and AIDS. Just a couple of decades ago, an HIV diagnosis was a near-certain death sentence. Nowadays it’s more of a manageable condition, not unlike many other chronic illnesses. People on highly active antiretroviral therapies (HAART) have seen the virus reduced to undetectable levels in their bloodstreams, and their life expectancies are quickly approaching those who are HIV negative. With prevention drugs such as PrEP showing near 100 percent effectiveness when taken as prescribed, and talk of a vaccine being imminent, it’s not overly optimistic to imagine the eradication of AIDS in our lifetimes.

Given these statistics, it might surprise people to know that up until this week, people living with HIV in the U.S. could not buy term life insurance, outside of a few small-value employer policies. This Wednesday that changed, when Æqualis, a new company founded by Bill Grant and Andrew Terrell, in partnership with Prudential Financial, began offering 10- and 15-year life insurance policies to individual consumers. GOOD spoke with Terrell and Grant about how Æqualis came into being, and how these new policies might change our perceptions about the nature of the AIDS epidemic.

Grant is no stranger to the insurance business. His first job in 1985 was working the streets of San Francisco, selling life insurance and benefits to business owners and their employees. He keenly remembers the struggles many in the LGBT community in San Francisco faced trying to obtain insurance policies. Since then, he has started a number of other businesses, most notably a winery in Paso Robles, California.

In 2008, Grant suggested to his brother that they get life insurance to fund a “buy-sell” agreement for a small business they were invested in. It was then that he found out his brother was HIV positive and could not purchase a policy.

“Then all those memories came back, the challenges and all the declinations. So I knew why my brother couldn’t get life insurance, but I was a little bit stunned that there hadn’t been any advancement, considering what I knew about Michael, whom we affectionately call ‘Magic’ because of how healthy he is.”

Over the last 30 years, Grant has had four people close to him diagnosed with HIV. Aside from “Magic,” Grant’s uncle Michael has been HIV positive for almost 20 years and leads a healthy, active life. Not everyone has been as fortunate. Michael’s partner, Chris, passed away within the last 18 months of complications from AIDS. And after quite a long battle, Grant ‘s brother-in-law Michel succumbed to opportunistic infections and passed away in 2006; Grant and his wife had moved Michel in with their family for almost a year to help him get back on his feet after being diagnosed with AIDS.

In 2011, Grant received a call from a friend in Connecticut who knew about his brother and told him what Terrell was up to. Grant immediately flew to New York to meet with Terrell.

“I jumped into this project with two feet simply after one dinner, understanding the research Andrew had done, and his math, and the way he summed it up for me,” Grant says.

In the summer of 2005, Terrell was helping his brother-in-law and his partner move into a new house. A bunch of friends were helping out, and after they moved everything in, they all adjourned to a local pizzeria for lunch. There Terrell was shocked to hear that one of the men, an otherwise healthy person who happened to be living with HIV, couldn’t get a loan for his business because no lending institution would make a loan without “key man” life insurance, something no insurance company would consider for a person living with HIV.

“Fast-forward to 2006-2007,” Terrell says. “I’m working at a trading desk at Bear Stearns and I get an opportunity to analyze longevity of people living with chronic medical conditions including HIV. It sort of became apparent at that point—to me, anyway—that people living with HIV had better life expectancy than the insurance companies were giving them credit for. Jump forward again to 2010-2011, and I get an opportunity to really analyze 4,300 HIV-positive lives, their longevity, mortality, etc. From that I was able to create a mortality curve, and that convinced me it was possible to provide life insurance at an affordable premium level for those living with HIV.”

That was all well and good, but how was he going to go about persuading the major insurance carriers that he was right?

“This is where partnering with Bill made the big difference,” Terrell says.

[quote position="full" is_quote="true"]My goal has always been that when this thing launches, my brother Michael and I could get the same policy. I’d be on one underwriting path, he’ll be on another.[/quote]

Grant decided it was best to take a contrarian approach. He didn’t think they would be able to get the carriers interested straight away, so he and Terrell decided to approach Munich Re, the world’s largest reinsurance company. (Reinsurance companies provide policies to other insurance businesses that allow them to share the risk and limit the total loss a regular insurer would experience in case of disaster.) Munich Re was skeptical at first, but after digging into the data, they realized Grant and Terrell were right. But not only that—they also discovered through their research that on another side of their company they were already reinsuring some 55,000 HIV-positive people from South Africa and Europe. Munich Re added their data to Terrell and Grant’s, which significantly helped refine the mortality curves.

“Once you got the world’s largest reinsurance company on board, you can then go and have conversations with the insurance carriers,” Terrell says. “Because we’ve done all the heavy lifting, and we had the largest reinsurance company to take on 90 percent of the mortality risk if necessary, that changed the conversation. Then we took it to Prudential, who enthusiastically received it.”

But it wasn’t as easy as it sounds. Convincing Prudential took months, and their resistance had a lot to do with the nature of the insurance business and the specific issues relating to HIV. While the virus has been manageable for a long time, the original antiviral treatments of the ’90s, such as AZT, were fairly toxic in their own right. So even if people weren’t dying of AIDS anymore, they were still dying of other things like kidney and hepatic failure, which caused insurance carriers to shy away from the condition. It’s only recently that the medications have become less toxic and people’s life expectancies have substantially increased.

Another important issue among insurance carriers was the relative size of the market. Of the 1.2 million people living with HIV in the United States, roughly 75 percent of them live pretty close to the poverty line, reducing the insurable population to about 200,000, a size that isn’t economically big enough to “move the needle.”

For Grant, the most crucial element in convincing Prudential was that they didn’t build a “special product” for HIV-positive people. Instead, they’re adapting a term product that’s already an essential item in the marketplace.

“The rates actually fit within the tables that are already there. They already have rates for chronic illnesses that fit with the rates required for this, so that made it much better. My goal has always been that when this thing launches, my brother Michael and I could get the same policy. I’d be on one underwriting path, he’ll be on another.”

Having Prudential on board was key, but Grant and Terrell understood that Æqualis would only be successful if they got the support of the LGBT community, still the population most affected by HIV in the United States. So from the moment they started the company, they began to reach out to people in the community, starting with the Gay and Lesbian Center of Los Angeles. Financial planners and insurers with a high concentration of LGBT and HIV-positive clientele were consulted to provide information on the lay of the marketplace. Tom Roth at Community Marketing helped them survey the community, so that they’d be certain that what they were crafting with Prudential would meet the needs of those with insurable interests. In 2014, David McFarland, former CEO of the Trevor Project, came on board to help them with community outreach on the West Coast and in New York, introducing them to a number of highly visible “influencers.”

“Part of this goes beyond just offering the insurance product,” Terrell says. “The cornerstone of our organization is that we have a foundation, where hopefully we make money, but the whole aim is to give back into the foundation ... we are going to give back from our top-line revenues into the community.”

Still, community outreach alone won’t guarantee Æqualis’s success. These policies may be game changers, but they are certain to present their own challenges in terms of marketing and sales. Not just in terms of visibility for a niche product—explaining how something that didn’t exist before will now be available—but also in terms of convincing HIV-positive people why life insurance is even necessary.

[quote position="full" is_quote="true"]By not offering life insurance to HIV-positive people, the insurance industry was telling the country that HIV is a death sentence, because if it wasn’t, they’d offer life insurance, wouldn’t they?[/quote]

“It’s going to be interesting, the visibility issue,” Grant says. “We’re not going to run full-page ads in newspapers. We have access to a database of a finite group of planners and advisers who are more centrally working in communities where HIV is most prevalent, not just in the LGBT community, to expose them to the fact that this insurance will now become available to them.”

According to Mark Brennan-Ing, director for research and evaluation for ACRIA, one of the country’s leading AIDS service organizations, it is the older and long-term survivors with HIV who are among the most disadvantaged by the lack of life insurance.

“Some who were diagnosed before effective treatments were available only expected to live a few years and burned through their cash reserves and maxed out their credit cards,” Brennan-Ing says. “Others have lost their jobs following their HIV diagnosis, and have been unable to re-enter the workforce. Many are afraid to go back to work due to the loss of benefits and services when they are no longer on disability. I’ve heard one older HIV-positive man describe the situation of being on disability, but wanting to work, as ‘golden handcuffs.’ Our research on older adults with HIV found nearly two-thirds were on disability and the vast majority reported inadequate incomes.”

Brennan-Ing believes that people who are unable to access life insurance lack a critical financial resource when they enter old age. He explains how these policies often serve as mechanisms for savings in later years, providing income for surviving family members, and money to cover funeral expenses—all things that would allow the HIV-positive person fewer stressors later in life. But it’s not just the economic impact; it’s the psychological one. Life insurance would help destigmatize HIV, normalizing its transition into a chronic disease from a life-threatening one.

As enthusiastic as Grant and Terrell are to see these policies come to the marketplace, both agree that policies for HIV-positive people are just the beginning for Æqualis.

“There’s an enormously unrecognized need for insurance in the community,” Terrell says. “HIV insurance is the first step. It’s not the journey. There are a lot of other needs out there ... [For instance,] community businesses ... Talking with NGLCC [National Gay & Lesbian Chamber of Commerce] and other lesbian and gay chambers of commerce across the country, I found out there are 3 million gay-owned or significant gay management presence businesses in the country, and many of them are woefully uninsured and unable to offer good benefit packages. There are a lot of things that we need to do yet.”

Still, Grant is happy that, at the very least, these policies will get people to start seeing HIV in a new light:

“De facto by not offering life insurance to HIV-positive people, the insurance industry was telling the country that HIV is a death sentence, because if it wasn’t, they’d offer life insurance, wouldn’t they? Now they’re going to, and it will be quite visible for the people who aren’t living with HIV, or don’t know anything about HIV. Restarting the conversation and being part of that process to re-educate is a huge component of why I got involved in the first place.”

The thing about restarting conversations and re-educating people is that it takes a lot of passion and persistence. You have to not only expect resistance, but be determined to work through it, patiently and tirelessly. It may seem unlikely that two straight men, a divorced father of two and a father of four who’s been married for 27 years, would become the founders of a company dedicated to becoming the first ever to provide life insurance to those living with HIV. But maybe those sorts of assumptions are outdated, much like the idea that HIV is a death sentence, one more relic we can leave in the past. Maybe it really is as simple as Terrell puts it, when asked what motivated him to get so deeply involved in this project.

“My family,” he says. “And the need to be able to look myself in the eye.”

Grant concurs. “I didn’t want to get back into the financial services world unless there was a really strong reason,” he says. “[After] four years and lots of money, Andrew and I have done this on our own. Even though it’s a niche and everyone talks about how people want to do unique things ... this one was out there far enough that anybody outside of us wanted to see the ball go across the goal line before getting involved. So we knew we were going to be going it alone. And that’s what we’ve done.”