Thinking of taking a genetic test? Find out how family history can affect your life insurance coverage.
Genetic testing can have a significant impact on your life insurance policy and how you approach cover. Here's what's affected:
The effect on your policy
- If you have had genetic testing then insurers may consider this over your family medical history when determining risk.
- Premiums. Genetic testing might lead to higher premiums or lower premiums and might lead to more or less favourable policy terms.
- Restrictions and exclusions. Testing may lead to a reduced coverage period or exclusions for a particular condition (or an exclusion all together).
How you approach cover
- Disclosure. If you have had genetic testing, then you must disclose this to an insurer.
Genetic testing and life insurance
- How and why genetic testing can affect life insurance
- When can genetic testing lead to lower premiums?
Genetic testing can substantially impact your life insurance, and it can be worth understanding these impacts and the rules around your disclosure obligations before having a genetic test or taking out a life insurance policy. This guide explains how genetic testing might affect your life insurance cover and the different situations in which you are, and are not, obligated to disclose these tests to insurers.
When you take out a life insurance policy, including disability, trauma and income protection insurance policies, you are obligated to let the insurer know about matters which could affect the risk they take in offering insurance. On policies, this obligation might be phrased as an obligation to disclose “every matter known to the applicant, or could reasonably be expected to be known, that is relevant to the insurer’s decision”. This is known as your duty of disclosure.
You are required to disclose family history (which includes genetic testing)
As such, application processes will often include a section for you to provide details of your family history, such as whether any of your parents or siblings have certain medical conditions. If you have undergone predictive genetic testing and know the results of it, then you are similarly required to provide this information.
What happens if a genetic test is submitted?
Sometimes this information can lead to higher premiums, additional policy exclusions or even being outright denied cover by an insurer. Conversely, it can also lead to lower premiums or other more favourable policy terms. Some changes that may happen include:
- A higher premium
- A length of coverage
- Exclusions for specific medical conditions
- Offer you a different policy
- Deny you cover all together
What is used if I haven't taken a genetic test?
Generally, if you’ve taken a predictive genetic test then its results will be used to determine your insurance terms. If you have not taken a predictive genetic test, then your available family history will typically be used instead, along with all the other relevant factors. Family history may be disclosed in a questionnaire when you apply.
Without genetic testing
If you have a family history of hereditary diseases or other health conditions, then you are required to disclose it to life insurers who will generally adjust your premiums and policy terms accordingly.
For example, if your family has been diagnosed with cancer at an unusually high rate, then insurers might reasonably assume you are also at higher risk of getting cancer at some point.
Genetic testing can tell a more detail story (than a health questionnaire)
However, sometimes genetic tests tell a different story to family history, in which case it may “override” your family history and lead to lower premiums or other more advantageous policy terms.
This can also lead to higher premiums
- Just like genetic testing can lower your premiums, it can also lead to higher premiums if the test sheds more light on an unfavourable condition.
Generally, you are required to disclose the things that you know about your first degree relatives to an insurer. First degree relatives includes:
- Brothers and sisters
If you are not aware of any potentially genetic health conditions in any of them and it is reasonable that you should not be aware of them, then it might be worth investigating one’s insurance options before undergoing genetic testing.
Generally, you will always be required to disclose what you know about your first degree relative’s medical history to FSC member insurers, regardless of whether or not you have undergone predictive genetic tests.
Here's when you'll need to disclose
If you have undergone testing and results are pending, then you will need to disclose this with your insurer. Your insurer will typically wait for the result before proceeding with an application.
Are there situations where I won't need to disclose my results?
If you have ever undergone genetic testing then you are generally required to let the insurer know that you’ve done this. However, this is not necessarily the case if you have undergone testing but do not know the results of it. Here, you are sometimes not required to tell the insurer that you have had a test at all.
There are several situations in which this might be the case.
- You have given a blood sample, but testing has not commenced. You have the right to withdraw your consent to testing at any time prior to the laboratory starting the process. If you withdraw your consent, then you are not required to say that you have had a genetic test, even though you have given blood samples.
- You have exercised your “right not to know”. If you have exercised your right not to know the results of any genetic test, you are not required to disclose that you have had it.
- DNA banking: This is when someone provides a sample for testing to be done in the future, for the benefit of their family members. You do not know the results and do not have to disclose that you have undergone the test.
If you have undergone genetic testing for research purposes, such as might be conducted by a university, then your disclosure obligations depend whether there might be follow-ups. Prior to testing, researchers should explain which of the following may apply, or you may be able to select one of the following.
If you won't receive any personal or family information from the research
- You are not required to disclose that you’ve had a test.
If you will receive a personal result from the research
- This is considered the same as having a clinical genetic test and you are required to disclose this to insurers.
If the research company contacts you later on
The third option is that you will not receive personal results, but may be contacted later. Here:
- If you have not been contacted at the time you apply for life insurance. You do not need to disclose the test if you have not been contacted at the time of the application.
- You have been contacted about a follow up when you apply. You will need to disclose it if you have been contacted again and advised that a test may be important to your health, or told that there are specialist follow-up services you might be interested in, or similar. This is because you are now reasonably aware that there are matters which an insurer may want to know about, and are therefore obligated to disclose these.
You are not required to undergo genetic testing before taking out life insurance, although it is possible that insurers might request it.
What if I find myself prone to a genetic condition?
Insurers will often want to know about preventative measures you might be taking, and may consider these as well. For example, someone might be found to be at unusually high risk of heart disease, in which case that person may be able to explain that they regularly take blood cholesterol tests, consult dietitian's and are generally taking steps to manage the issue.
This person might then be able to access more favourable policy terms than someone who is not taking any steps to manage the same health issue.
Can genetic testing be beneficial?
Some people may decide not to undergo genetic testing for fear of it adversely affecting their life insurance cover, but it may be able to help lead to preferable health or insurance outcomes.
- If genetic testing shows that you are at relatively low risk of certain health issues, then this might lead to more favourable insurance terms, such as lower premiums, than you might have accessed otherwise.
- If genetic testing shows that you are at risk of certain health issues, then it might be preferable to know about it, because you might start taking precautionary measures or looking at ways to manage a potential condition.
Everyone’s situation is different and the decision is entirely up to you, although you may want to consult advisers or specialists prior to a test. To recap:
- If you have not undergone genetic testing, your insurance premiums and cover will be more based on your family history.
- If you have undergone genetic testing, your insurance premiums and cover will be more based on those results than your family history.
Note that everyone’s situation is different and you should consider the information provided here at your own discretion. This guide is simply an overview of the relevant legislation around genetic testing and life insurance in Australia with examples of situations in which this may be applicable.
This guide is not intended to influence anyone’s decision around whether or not to undergo testing, or to provide any health-related advice of any kind.