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THANKS to breakthroughs in AIDS treatment and firmer life-expectancy data for people suffering from the disease, Hong Kong insurers are adding AIDS coverage to policies.

  In the past month, two companies have departed from standard SAR practice by launching products that feature limited benefits for some people afflicted with acquired immune deficiency syndrome or the human immunodeficiency virus, which leads to AIDS.

 Principal Insurance Co (Hong Kong) began offering employers a health-maintenance package last month that covers all life-threatening illnesses, including AIDS. HSBC Insurance has revised its critical-illness product - LivingSurance - to cover AIDS and HIV-related sickness in some cases.

 Life insurers around the world are boosting their AIDS coverage because new drugs capable of beating back HIV have made the disease more treatable, and the passage of time has made it more predictable.

 Danny Quant, a director and consulting actuary at Watson Wyatt Hong Kong, said enough people had now died of AIDS for the insurance companies to be able to make reasonably accurate risk calculations.

 Despite the liberalising trend, however, insurers continue to minimise risk by limiting the benefits offered to AIDS and HIV sufferers.

 The new policy offered by Principal caps the maximum payout to AIDS and HIV patients at half of the $1 million granted to policyholders who contract other critical illnesses.

 The HSBC Insurance product covers only those AIDS and HIV infections contracted through blood transfusion received at least two months after the policy's start date.

 Anyone known to have AIDS would not be eligible for the scheme, said Catherine Ng Po-chu, HSBC's personal-insurance executive.

 In spite of these limitations, AIDS groups have welcomed the policies, saying they could provide something, at least, for a growing number of people.

 There are 855 HIV sufferers in Hong Kong and 274 people with AIDS, according to Department of Health figures. Anonymous testing puts those figures twice as high.

 'It is a step forward when you consider [people with AIDS and HIV] have been offered nothing up until now,' said Hong Kong AIDS Foundation senior programmes officer Rene Ko Mei-lan. '[But] we do have some concerns about how insurance companies will handle the confidentiality aspect. We will be taking a closer look at the policies before we encourage anyone to sign up.'  Critical-illness insurance is an expanding field worldwide, and appears to be a growing market in Hong Kong. Offered overseas since the 1980s, critical-illness policies are designed to help individuals diagnosed with life-threatening conditions to cope with income loss. They often are encouraged as a booster to standard life insurance.

 Under a standard life-insurance policy, the person who pays the premium gets none of the payout - because it is contingent upon death.

 By contrast, under critical-illness coverage the policyholder gets the lump sum to spend - be it to pay for medical care, to replace income lost during hospitalisation or, perhaps, to fulfil a dream to raft down the Amazon.

 Premiums vary, but most insurers calculate the cost based on the policyholder's age, sex, salary and occupation, charging from $1,800 to $3,000 annually.

 Lump sums of up to $1 million are paid out immediately upon diagnosis of one of the listed terminal illnesses - and this, critics say, is where the risk lies for consumers.

 Principal's director of marketing Christopher Reddy said conventional critical-illness coverage could be a gamble, as some packages offered payouts for only a few of the most common terminal diseases.

 Principal's product covers all critical illnesses. The HSBC Insurance product covers 31 terminal illnesses.

 'Customers weren't buying the [insurance], because they said they didn't feel they would be well-enough covered. Having seven illnesses on the list wasn't enough,' Ms Ng said.



Insurers take on AIDS cover