A California insurance company sold 80 policies to cover potential AIDS victims in the first week it offered the coverage.

"The fear is tremendous," said James Hotinger, vice president of Coastal Insurance in Santa Monica, which introduced the policy last month. "There seems to be a great need for it."

The policy, which costs $194 a year, pays up to $73,000 in the first year after a person is hospitalized for acquired immune deficiency syndrome, the company said.

Most of the policies were sold to people in Los Angeles, San Diego and San Francisco, where there are large homosexual populations. Homosexual men are among the most likely to contract the immune system disease.

"It's very similar to any dread-disease policy," Hotinger said. Such policies, designed to help cover the costs of one specific ailment, are not usually offered by major insurance companies such as Blue Cross and Blue Shield.

"Our benefits program covers dread diseases like any other diseases," said Barry Wilson, a Blue Cross-Blue Shield spokesman. He said dread-disease policies can lead people to the mistaken belief that their existing insurance is inadequate, "which I think makes them fearful."

But Hotinger said AIDS victims often lose their jobs and have trouble meeting day-to-day expenses. The AIDS policy, he said, can help with those expenses.

He said advertising for the policy is "very low-key. It's not meant to scare at all."

Another company, Dallas-based Continental Insurance Services, says it has received premium payments totaling about $55,000 for a similar policy, according to a Blue Cross-Blue Shield report.