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In the UK, around 7 million people spend around £ 3 billion a year on medical insurance. One in seven policies are taken out by individuals with the balance being put in place by their employers. The problem is that medical insurance is complex and few policyholders take the time to really study the details of their cover. As a result, many misunderstand what will be covered. If you expect medical insurance to pay every health claim, you're mistaken.

Medical insurance is designed to provide protection for curable, short-term health problems and allow policyholders to jump queues to see the NHS consultants, be diagnosed, receive surgery or be treated. That sounds fine, but before you buy you need to appreciate the treatments and situations that fall outside the scope of the cover.

But first a word of warning. This does not relate to any article specific policy and the terms and conditions issued by individual insurers do vary. So please ensure you so check your policy documents. After reading this article, you'll know what to look out for!

Sorry - it's a chronic condition

If a condition can be cured and is not a long-term problem, your insurance company classify it as to acute and should meet the cost. If your problem is incurable or it's a problem that, despite appropriate treatment, wants to be with you for a long time, then your insurance company will classify it as chronic - and no, you won't be covered.

But deciding whether a condition is acute or chronic is fraught with problems. It's rarely a black and white decision and this can lead to a major area of conflict between the policyholder and the insurer.

It's clear that asthma and diabetes are chronic conditions as you're almost certain to suffer from them for the rest of your life. So those categories of illness are not covered.

Problems arise when doctors initially consider a patients' condition to be curable, but the condition later deteriorates and the medical team changes its' mind, it's now become incurable. This can sometimes happen, especially in the treatment of certain types of cancer.

In these circumstances, the condition is initially defined as acute and is therefore insured, but deteriorates and becomes chronic - and outside the terms of cover. This is possible as insurers retain the right to reclassify a condition from acute to chronic during treatment.

Sorry - it's too long term
The insurance company will not pay out for long term treatment. But you need to check your policy documents to see how they define "long term". You can find the situation where a course of drugs extends for say 12 months, but the insurer will only pay for ten months.

Sorry - it's preventative
Your insurance is designed to pay for the treatment and cure of conditions when they arise. It is not designed to pay for treatments that are used to prevent to illness.

Again, the problem of definition arises. Sometimes it is arguable whether a treatment is preventative or a cure. Take the drug Herceptin for example. This drug can be used in the early stages of breast cancer. Research shows that Herceptin can halve the incidence of cancer returning for women who have a particularly virulent form of the cancer known as HER2. In this situation, is offering a Herceptin cure or is it a preventative?

Insurance companies are split on the debate. Norwich Union, EPA, BUPA and standard life healthcare will pay for Herceptin for HER2 patients whereas legal and General and AXA PPP will not.

Sorry - the drug is not approved
Two of the main attractions for taking out medical insurance are: to jump the queues at the NHS, and to get the latest treatments and drugs. But there's a rider.

The Institute for health and clinical excellence exists to approve the use of new drugs by the NHS in England and Wales. Until that body has approved the drug your insurer is unlikely to pay for its use. The problem is that the Institute's brief is to perform a cost/benefit analysis to ensure that the financial benefits to the nation from using the drug, outweigh the costs of using it in the NHS. A difficult brief and it has placed the Institute under scrutiny for the extended delays in drug approval.

The compromise hit on by the Financial Ombudsman is that if your medical policy won't pay for the use of experimental treatments, then it should meet the cost of an approved conventional treatment with the policy parties footing the bill for the balance if the experimental treatment is more expensive.

Sorry - it's a pre-existing condition

The basic principle is that if you are already suffering from a condition when you start a policy, then for its treatment of that condition "pre-exists" the policy and any claims are invalid.

For this reason, insurance companies insist you complete on exhaustive questionnaire before they agree to insure you. After all they need a clear picture of your medical condition before they quote. For many applications, the insurer will, with your approval, so write to your GP for specific details of your medical history. They like to have a complete picture.

So lets say some years ago you twisted your knee playing tennis. It appeared to recover but now it turns out that you have a torn cruciate ligament and it needs to be operated on. Your medical insurance company could argue that the ligament damage which a pre-existing condition and you have to pay for the operation.

Some insurers try to accommodate these grey areas with a moratorium provision within your policy. These provisions typically say that so long as you have been symptom free for two years relating to any condition you've suffered from within the last 5 years, they will pay for subsequent treatment. Not all policies have these time moratorium provisions and the periods do vary between insurers. You should carefully read your policy.

Sorry - its not covered

Medical insurance is an annual contract - just like your car insurance. So when it comes to renewal, your insurer is at liberty to review not only your premium but so change the conditions on which your cover is provided.

Therefore, if your policy comes up for renewal mid way through a course of treatment, it's possible to find that your new policy no longer covers that particular treatment. This means that you will have to foot the bill for the balance of the treatment.

Ford, Moreton, with ongoing advances in medical research, more and more conditions are becoming treatable. This progress has the effect of shifting back the dividing line between chronic and acute conditions.

This hits the insurers' pocket in two ways. With more conditions being reclassified as acute, the number of claims is increasing. And there's also a trend for new treatments to cost more - Herceptin being a good example. The net result is that the insurers are finding themselves having to pay out far more. This is inevitably passed back to you through increased renewal premiums. And in to attempt to reduce their risk exposure, insurers have a tendency to adjust their definitions and exclusions. This means that you must read your renewal notice closely before you decide to renew.

So if you're tempted to buy medical insurance, be aware that everything is not always black and white. If you've got insurance and need treatment, you're well advised to contact your insurer without delay and get them to confirm that they will meet the cost of your proposed treatment.

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Although there have been medical advancements that have helped to prolong the lives of HIV patients, finding life insurance coverage for HIV infected individuals continues to be elusive.

According to the most recent statistics by The Henry J. Kaiser Family Foundation, the number of new HIV infections in the U.S. reached 56,300 in 2006. The number of people living with HIV/AIDS was 1.1 million, with 468,000 of those individuals living with AIDS. The U.S. Department of Health and Human Services reported in 2007, that the largest number of new HIV/AIDS diagnoses for persons aged 40 to 44 accounted for 15 percent of all HIV/AIDs diagnoses in that year.

Respectively, the use of antiretroviral (ARV) Therapy or highly active antiretroviral therapy (HAART) such as protease inhibitors with a combination of other HIV drugs have extended the life of those living with HIV by slowing the progression of the disease to full-blown AIDS. A study by the National AIDS Treatment Advocacy Project in New York and the ATHENA National Observational Cohort Study in February 2010 found that the average life expectancy of people living with HIV has been extended from seven years (before 1995) to 24 years - if they follow the proper drug therapy regimen. This includes those who take their medications on a regular basis and maintain a healthy lifestyle.

Ryan Pinney, brokerage director and life impaired risk specialist at Pinney Insurance Center Inc. in Roseville, Calif. says following the introduction of drug cocktails that counter the infection- people with HIV can expect to live longer healthier lives.

"If you contracted HIV in the late 70s or early 80s, it was a death sentence. Nowadays, with the addition of antiviral drugs, it is not uncommon for people with HIV to live 20 years without the condition developing into AIDS," says Pinney.

Whose at risk?

From 2004 to 2007, the numbers of HIV/AIDS diagnoses increased among men who have sex with men (MSM).

In that same timeline, the estimated numbers of HIV/AIDS diagnoses increased among male and female adults and adolescents with HIV infection attributed to high-risk heterosexual contact.

Cumulatively, MSM (53 percent) and persons exposed to high-risk heterosexual contact (32 percent) accounted for 85 percent of all HIV/AIDS cases diagnosed in 34 states in 2007.

By gender, 77 percent of adults and adolescents living with AIDS were male. Of the 104,560 female adults and adolescents living with AIDS, 66 percent were exposed through heterosexual contact.

Source: United States Department of Health and Human Services

If you have a strong prognosis at the start of the illness, meaning you have managed to keep your CD4 T-cell count above 500 cells for at least three years, chances are you will have a greater life expectancy. In July 2008, a study conducted by the University of Bordeaux, France found that HIV-positive males whose CD4 count was above 500 cells for an average of three years, had death rates that were identical to those in the general population. Unfortunately, among HIV-positive women, the death rates didn't balance out even after five years of maintaining a count above 500 cells. In fact, HIV-positive women experienced a 2.4 percent increase in death rates when compared to the general population. More studies are pending that help explain this phenomenon.

Pinney notes that for people who contract the disease at a young age, the improbability of receiving a life insurance policy is higher. However, if you have lived longer with HIV, it might be easier to get a policy.

"The reason for this is because you have a proven track record of maintaining the illness," says Pinney.

Dr. Ann Hoven, chief medical officer for the Individual Life Division at the Hartford, says that insurers have considered the possibility of covering HIV, but there are still a number of unknowns.

"The basic dilemma is that although the life expectancy for someone with HIV can be over 20 years, those who become newly infected are younger people," says Hoven. "The life expectancy of a person with HIV is more like 40 to 50 years of age, and most people expect to live to be in their 60's, 70's and 80's."

She adds that it can be difficult to make assessments of a person's life expectancy with HIV and set premiums based on the information they receive.

"The data really isn't there yet," she says. "There are people who seem to be resistant to infection where their immune system takes care of it, and then there are others that are completely vulnerable to this illness. The results of the studies that have been conducted haven't provided any definitive data to pull from when it comes to estimating how long an individual can live with this illness. It's very case by case."

Limited options

When it comes to purchasing life insurance, most people who have been diagnosed with HIV will be faced with an automatic decline or enormously high premiums.

"You would have to have a breakthrough to make the numbers work out when trying to write a policy for someone with HIV," says Hoven. "When you look at the numbers the cost would be so astonomical that no one would buy it [the policy]."

"If you have been diagnosed with HIV, getting life insurance may be tough, but it's not unheard of," says Pinney. "It can be accomplished if you receive insurance through a group plan, such as an employer, trade association or union."

However, if you are HIV-positive and you attempt to get life insurance on your own, most insurance companies will refuse to sell you a policy, this includes companies that offer "simplified issue" life insurance coverage where you would only have to answer a few health questions. Even when applying for a simplified issue policy, you will likely be required to answer questions about HIV/AIDS. Other, more traditional individual life insurers may also ask that you take an HIV test.

"The requirement by insurers of an HIV test varies by state and the face value of the policy," says Kim McKeown, spokesperson for the Society of Actuaries. "Nonetheless, the underwriting process is used to discern information on one's medical profile, and if the person is taking antiviral drugs which would be found in the medical record, this might prompt an insurer to ask for an HIV test. Even with the best medication, folks with HIV do have a shortened life expectancy so the best information possible is critical during the underwriting process."

Mckeown adds that from an insurance company's perspective, asking a potential policyholder to take an HIV test is really no different than asking someone about his or her family health history, what types of prescriptions they take daily, or if they smoke.

If you are able to get a simplified issue insurance plan, they have a limited face value amount, typically $150,000 to $250,000 on the high-end of the spectrum.

A more viable option is purchasing a "guaranteed issue" life insurance plan. When a policy is considered "guaranteed issue" this is the maximum amount of coverage allowed to an individual without a medical evaluation. Anyone can purchase a guaranteed issue plan since they do not require a medical exam, but they are usually nuts and bolts policies that only provide a death benefit. The death benefit is generally $20,000 or less and if you die within the first two years after you buy the policy, your loved ones could receive nothing.

There are also small group plans to consider that are essentially employer-sponsored specialty plans that cover key employees at a company.

Pinney recalls a situation where a group of partners at a firm requested a guaranteed issue group plan that would cover all the senior and junior partners at the firm. One of the individuals was HIV-positive and the group managed to negotiate a policy that provided over a million dollars in life insurance to each person in the group.

While it's clear that this method can work, Pinney says that because of the stigma attached to people living with HIV, this is primarily the reason why most employees won't suggest this type of coverage to their employer.

While someone with HIV may be able to get a life insurance policy from an insurance company that specializes in high-risk cases, it's certain that it will most likely be a costly policy with a graded benefit. For example, a 40-year-old HIV-positive male can get a $50,000 whole life policy, but he would pay a high annual premium of $2,600.

"There are very few companies, maybe three or four that offer policies for people with HIV," explains Pinney. "What they amount to is a guaranteed issue whole life policy with a graded death benefit or a benefit that increases gradually with age and eventually levels off during the life of the policy."

Still, Pinney says that if you die during the first, second or third year of the policy you may only receive your premiums and dividends with interest, other companies may only payout a specified percentage of the benefit amount if you die within that timeframe.

Will insurers cover HIV in the future?

Guaranteed Trust Life Insurance Co. based in Glenview, Ill., was the first insurance company to offer "impaired risk" whole life insurance to HIV-positive individuals. The company ceased selling the policies in 2004.

"One of the biggest problems with pricing an HIV policy is figuring out how to price it without getting beat up," recalls Pinney. "At the start of offering such a product policyholders were looking at a flat extra of $50 per $1,000 in insurance."

Pinney said that recently he attended a life insurance conference and posed the possibility of an HIV life policy to major life insurers. Unlike HIV, other medical conditions, such as cancer or heart disease have a longer track record of people having these conditions and better statistical data that an insurer can draw from. Even though HIV/AIDS has been around since the early eighties, Pinney notes that the underwriting science hasn't caught up with medical science yet.

"I don't see this type of product entering the market again anytime soon," notes Pinney. "Part of the problem is there is no mortality data available to create an accurate pricing model. I would be surprised if any insurance company would even remotely consider it for quite awhile."

"When we solve the societal issues concering HIV and find better ways to treat the illness or even a vaccine, I think that will be when the situation changes," says Hoven. "I really don't see this happening in the next five years, but we're definitely getting closer to it. "

Hoven recommends that if you have been diagnosed with HIV and your employer offers life insurance, it's best to take advantage of it.

"You wouldn't go through medical underwriting and you would receive the group-based premium that includes people who have a variety of different medical concerns," says Hoven. "Also, if you retire, most group plans allow the policy to be converted to a whole life policy."