Thinking of taking a genetic test? Find out how family history can affect your life insurance coverage.
- Term life insurance. $500,000
- Total and permanent disability. $500,000
- Trauma. $200,000
- Income protection. $4,000/month
If you take out more than those amounts...
Genetic testing may have a significant impact on your life insurance policy and how you approach cover. Here's what could be affected:
- If you have had genetic testing then insurers may consider this over your family medical history when determining risk.
- Premiums may change. 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).
Do I need to disclose a test?
If you have had genetic testing and have seen the results, then you must disclose this to an insurer whether good or bad.
Need to know
- Genetic testing rules in Australia vs the world
- Why does it affect life insurance?
- Does it affect my other insurances?
- Can genetic testing lead to lower premiums?
|Are insurers regulated?||Countries||Number of countries|
|No regulation||United States, China, Finland, India, Spain,||5|
|No regulation (but codes of conduct exist in insurance industry groups)||Greece, Japan||2|
|Insurers can't require genetic tests and can't discriminate if the applicant refuses to take one.||Australia||1|
|Insurers are restricted from using results from existing tests if the policy is below a certain amount.||Switzerland, United Kingdom, Germany, Netherlands||4|
|Restrictions on all tests sometimes including family history||France, Ireland, Poland, Portugal, Singapore, Austria, Belgium, Canada, Denmark||9|
Source: Research Reports. June 09, 2017 Genetics and Life Insurance – A View Into the Microscope of Regulation
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
Your health insurance (e.g. extras and hospitals) won't be affected in any way. By law, health insurers aren't allowed to use risk assessments to determine whether or not to cover you.
Likewise, no other form of insurance, like car insurance or home insurance will be affected, as those have little to do with your health profile.
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.
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.
When applying for insurance, you may be asked about the following. Here's a general guide of what you may be asked:
- You personal details like age and gender
- Results of any medical and genetic tests you've taken (From 1 July 2019 - see limits).
- Any medical conditions your parents, children, brothers and sisters were diagnosed with and at what age.
- Info about any screenings and preventative measures you've taken.
When it comes to parents, children, brothers and sisters here's what does and doesn't need to be disclosed:
|Disclose||No need to disclose|
If your life insurance policy is "guaranteed renewable", it means that the insurer is required to keep offering you the policy year on year as long as you keep paying your premiums. You don't have to disclose any changes to your health and you don't have to tell them the results of any recent testing, genetic or otherwise.
If you have a 'good result' once your policy is started
That doesn't mean you can't tell them about the good stuff. If a genetic test returns a positive result, for example you don't carry a faulty gene that affected other members of your immediate family, your insurer can remove that from your risk profile. Contact your insurer to see if this can help reduce your premiums. If necessary, you can involve your GP, genetics specialist and other medical professionals in your negotiations with the insurer.
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.
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.
Before choosing your cover, it's worth considering one that's a member of the Financial Services Council (FSC). These insurers have promised to abide by the Life Insurance Code of Practice and this can protect you in your dealings with the insurer.
Here are some tips that will come in handy when dealing with an insurer (made easier if they're a member of the FSC):
- Request an explanation for high premiums. The Life Insurance Code of Practice requires the insurer to tell you why results of your genetic testing have caused your premiums to increase above the standard rate. Contact the underwriter and request an explanation in writing if none has been given.
- Follow your insurer's disputes resolution process. Most insurers have an internal disputes resolution process and will outline this process in their product documentation. If a problem comes up with an application or renewal, see if there's a way to resolve it internally first.
- Bring in professional support. If you think the insurer hasn't properly assessed your genetic test results and following the internal disputes process didn't help, talk to your GP, genetic specialist and other medical professionals. They may be able to help you understand the insurer's decision and even get involved in your negotiations with the insurer.
- Get it in writing. If an insurance agent or broker tells you that your application might be declined or might be offered to you at a rate that's much higher than the standard rate, ask them if they received this information in writing from the insurer's underwriter. If so, request a copy of that document.
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.