New Ban On Genetic Life Insurance Discrimination
The ability for life insurance companies to discriminate based on adverse predictive genetic test results will be banned under a new Government proposal.
Predictive genetic tests detect gene variants associated with heritable disorders that appear after birth, often later in life. But, they are not clinically detectable at the time of testing. Some insurers may ask about genetic tests on an insurance application. This mean that currently, results from predictive genetic tests can influence your ability to get life insurance.
Life insurance and genetic testing.
Voluntary insurance is individually underwritten and ‘risk-rated’. The cost of premiums is proportionate to the unique risks of the person seeking the cover. Most of us would be familiar with the questions about family history, personal medical history and habits.
As life insurance is a guaranteed renewable product, once a policy has been underwritten and commenced, the life insurer cannot change or cancel a person’s cover, provided they pay all future premiums when due, premium prices will change across a risk pool, for example based on age. It’s important to carefully assess changing life insurance policies if health issues or conditions have arisen since you put the original policy in place.
Genetic test discrimination.
In 2019, Australia’s life insurance industry introduced a partial moratorium on the requirement to disclose genetic test results. The moratorium, which is in place for insurance applications received from 1 July 2019, prevents genetic results being used for certain types of insurance cover below certain thresholds.
But, despite the moratorium, there is evidence that people are not undertaking genetic tests or participating in scientific research because of concerns about obtaining affordable insurance. And discrimination still exists.
The Australian Genetics and Life Insurance Moratorium: Monitoring the Effectiveness and Response Report by Monash University found that of the consumers surveyed who had undertaken a genetic test, 35% reported difficulties obtaining life insurance including insurers rejecting life insurance applications, financial advisers advising participants that their applications would be rejected, and insurers placing conditions on insurance policies or charging higher premiums.
The Government response.
The Government has stepped in and announced a total ban on the use of genetic testing in life insurance. The ban will be subject to a 5 year review. However, the Government has not introduced legislation enabling the reforms. They also haven’t announced the date that the ban will take effect.
It is also important to note, the total ban impacts predictive genetic testing only. It does not cover clinical diagnostic genetic testing to confirm a suspected condition based on signs or symptoms.
Concerned about accessing life insurance?
Get in touch with our Aintree Group Wealth team for individual advice.
This is general advice only and has not been prepared with your individual situation or needs in mind. For personalised advice, we highly recommend that you seek professional guidance from a qualified adviser.
