Dealing with the gay man's special financial problems

GAY men have found financial matters full of pitfalls because of the HIV risk and the way life insurance is woven into housebuying and saving as well as life and health insurance.

A former model turned financial adviser, Ivan Massow, says hundreds of gay men have managed the problems associated with getting a mortgage by lying about their sexuality.

'The trouble is, this could create more difficulties for gay borrowers than for the insurance companies,' he says in a book* to be published later this month.

'If you are found to have lied on a proposal form the insurer will most likely refuse to pay up if you die before the term of the policy.'

He believes there is no need to rush towards a repayment loan. These can prove poor value for those who move frequently and never pay off any of the capital.

An interest-only loan can be taken out and a personal equity plan or unit trust savings scheme set up to repay the loan rather than an endowment policy with all its threat of health checks and HIV tests.

He warns gay men who obtain large loans that insurance companies are likely to want to talk to their GPs, who may paint a different picture about their lifestyle.

Many gay men believe that if they are asked to take an HIV test they can pull out and walk away. But the life insurance company will assume that there is something wrong, Mr Massow says.

'It is a bit like refusing to take a breath test when you are stopped for drunk driving,' he says. 'And you will get put on the impaired lives register anyway.' This lists people who have a higher- than-average risk of becoming ill or dying early.

Naturally, he says gay men should take specialist advice. There are lenders, such as the Cheltenham & Gloucester Building Society, that have a policy of making interest-only loans not requiring life cover.

There are also some life companies that will now offer cover to gay men with a small extra premium, or even none at all, Mr Massow says. The large Scottish life offices are the best bet, while the banks are likely to refuse.

Gay men can be asked to pay up to two and a half times the 'normal' rate, but Mr Massow believes that the Aids risk has been overestimated by life companies. 'Any kind of loading is an outrage,' he says.

Lesbians have a lower- than-average risk of HIV, he points out, but even so they are not offered cheaper life cover than the rest of the population.

Many of the other financial planning points in the book apply equally to unmarried couples.

He points out the importance of making a will and completing an expression of wishes form to make sure that pension benefits go to the right person.

Personal pensions based on life assurance products may be problematic. 'If a salesman tries to persuade you to start a pension plan that includes an element of life cover, tell him to forget it,' he says.

Gay couples also need to sort out the ownership of property.

'I see lots of cases where two people have jointly contributed to a house but it is only in one name, and it can lead to costly court proceedings when things go wrong,' Mr Massow says.

'On the seedier side of homosexuality, there is a lower respect for marriage and some men can use it as a tool for helping people to get into the country or stay here. They need to be careful.

'Even after divorce, the 'wife' may still be eligible for money.'

*Ivan Massow's Gay Finance Guide, Fourth Estate, pounds 8.99.

(Photograph omitted)