From 1 April insurance companies will pay out life insurance and funeral claims to relatives of people who die of Aids-related illness, the Life Offices Association (LOA) said in Johannesburg on Tuesday.
Insurance companies belonging to LOA will no longer apply the HIV/Aids exclusion clause to life and disability policies.
The exclusion clause meant that no claims were paid out if a person with a life policy died of Aids, regardless of whether their premiums were up to date.
LOA chief executive officer Gerhard Joubert said although this was not binding, all LOA members had agreed to waive the exclusion.
LOA represents 95% of major insurance companies in South Africa.
Claims will not be denied
"Any claim for a lump sum death or disability benefit will not be denied by life companies based on the HIV/Aids status of the insured person, unless the policy holder is found guilty of material non-disclosure," he said.
The exclusion clause will be waived for all types of life and disability cover that pay lump sum benefits, including group life, credit life and funeral cover.
Fatima Hassan of the Aids Law Project said the announcement by LOA was "totally groundbreaking", one of the biggest moves the life industry had ever made.
"This will potentially lessen the socio-economic impact on families who lose a breadwinner to Aids," she said. – (Sapa)