How genetic testing may affect your life insurance
Traditionally, insurance companies would use your medical and family medical history to determine the level of risk you pose to obtain a life insurance policy. With the introduction of genetic testing, it has put into question how providers will use this information. Whether it will be for the benefit of the customer or if it will lead to discrimination when trying to obtain a policy.
What is genetic testing?
Genetic testing is a medical test that identifies gene mutations associated with genetic conditions. A genetic test can help to determine if someone is at risk of developing or passing on a genetic condition.
There are two types of genetic tests; predictive and diagnostic. A predictive genetic test identifies if a gene runs in the family but you, personally, show no signs or symptoms. The predictive test determines future health risks such as Alzheimer’s or cancer.
A diagnostic test can confirm if you have a condition when you are showing certain symptoms, or it can rule it out.
What information do I need to disclose during a life insurance application?
When you apply for a life insurance premium, you’ll need to let your insurance company know your age, address, occupation, medical history, family medical history and lifestyle. This is so that they can assess your level of risk.
Life insurance companies work as a business, and as they will potentially be paying out a lot of money in the event of your death, they need to know your current health information.
It’s also important to make sure that you are truthful when providing information as well. When they are looking for health conditions that impact your life expectancy, the chances are that it will come apparent through your medical records. They’ll also ask about travel plans in case you have been in certain countries where diseases may be prevalent.
Life insurance companies will also ask about your finances, especially in business cases. This is because they want to help you get the right amount of coverage that suits you. A life insurance policy is tailored to the individual’s specific requirements and lifestyle. As a result, these questions are asked to find you the right policy.
What information do I need to give about my family history?
When applying for a life insurance policy, an individual must answer brief questions about their family’s medical history. This only needs to include immediate blood relatives such as your parents and any siblings. Insurance companies ask this because it can increase your likelihood of getting a certain disease later on in life.
Insurance companies normally ask you to disclose any current or previous illness, any genetic conditions and any deaths in the family and what caused them. You are required to disclose this information to the insurance provider in order to obtain your life insurance policy.
When would an insurance company need to know about a genetic test?
Currently, in the UK, you don’t need to tell your insurance company about the results of a genetic test unless it has been approved by the Genetics and Insurance Committee (GIC).
So far, the test for Huntington’s disease is the only GIC approved test. In addition to this, the results of the test only need to be disclosed if you need life cover over £500,000 or critical illness cover over £300,000.
Although Huntington’s disease is rare, there is a 50% chance of passing it on genetically. If you have had a test, you may be asked to disclose it if you have a substantial amount of cover.
The GIC has not approved any other genetic tests. You are also not required to tell your insurance provider either before or during the policy term. They also cannot require you to take a genetic test of any kind in order to obtain insurance cover.
If you have had a genetic test and you wish to disclose either a positive or negative result, you are free to do so. If you have had a negative test, it could result in the removal of exclusions or additions to your premiums based on your family history.
Tailored life insurance policies
The question of genetic testing and how it affects the life insurance industry is one that is becoming increasingly talked about as technology advances. Access to genetic data could allow insurance companies to provide more personalised policies and potentially lower the cost throughout the industry.
More accurate data can help to streamline the process. This could mean less time and money is spent on the risk assessment process. But, would the data be used to improve life insurance access or will take that opportunity away from those who may need it?
Will genetic testing cause unfair discrimination?
The main concern over the use of genetic testing in the life insurance industry is whether it would be used to discriminate unfairly against those with genetic conditions.
Life insurance and health insurance providers already have wide access to medical data, lifestyle and activity patterns which they currently use to assess risk. However, if a genetic test comes back positive, will it be harder for people to get life insurance?
There are already documented cases in Australia where some people have been discriminated against because of a genetic test. One case highlights a woman diagnosed as having the BRCA gene. This is the gene which can lead to breast cancer. As a result, she had a double mastectomy to reduce her risk. She was eligible for life insurance, but the insurance provider excluded cancer cover and placed a 50% loading on her premium.
Australian law states that individuals have to provide known genetic test results if they are requested from an insurance provider. Yet, the government advises people to look into life insurance before taking the test. This can help to avoid discrimination.
Currently, this is not the policy in the UK. However, if the law is introduced in the UK, would it put people off getting life insurance?
Will people choose not to have a genetic test or not to have life insurance?
Evidence suggests that many people would opt to have a genetic test if it were to give them a better understanding of the health risks they might face. It also allows for the opportunity to have early medical intervention.
However, some would opt against getting a genetic test for different reasons. If there is no family history of genetic conditions, some people don’t see the point in getting a test. Others believe they don’t want knowledge of a disease they are unable to prevent. If people are likely to avoid the test, there is a significant chance that people will avoid life insurance too. Whether that’s because they find they don’t have a genetic condition and don’t need it, or whether the condition will prevent them from getting life insurance.
Essentially, finding out you are likely to have a genetic disease and then being refused life insurance cover can be a double blow which doesn’t sound particularly appealing.
The benefits of disclosing genetic testing
There are possible cons to genetic testing, but there are plenty of pros too. With genetic testing, there is a chance that it can help people to get early treatment of conditions. Early treatment can help to manage the condition. In turn, an individual may have a better outcome when applying for life insurance.
It can be especially beneficial to consumers if they already have life insurance. Lifestyle, age and illness can affect life insurance prices. As a result, it is recommended that life insurance should be taken out as early as possible.
Some people suggest that a wider adoption of genetic testing can actually make life insurance cheaper. Earlier awareness will lead to lower death rates, earlier management of illnesses and lower payouts for insurance companies.
It could also help insurance companies become more transparent. In particular, transparent in how they reach prices. This can help to increase the reputation of the industry as a whole. With more accurate data, insurance companies can tailor a policy to help people get more comprehensive coverage options.
An individual may pay higher premiums for their life insurance if there is a genetic condition in their family history. This could be the case even if they don’t actually have the gene. In this sense, genetic testing could result in fairer underwriting processes.
Whatever the outcome, making sure that everyone has access to an affordable level of cover should be the main priority for insurance companies. This helps to keep the industry running and doesn’t exclude people from obtaining life insurance.
Your genes don’t present the full picture
Genomics, the field of molecular biology concerned with mapping of genomes and evolution is currently at the forefront of technological advancements in health.
However, at the moment, UK insurance companies are choosing not to use much of the data that has become available. This is primarily because DNA alone cannot necessarily determine a condition. There are other factors that affect the condition such as nutrition, exercise and other lifestyle decisions. These factors weaken the link between genetics and disease.
The future of genetics and life insurance
It’s highly unlikely that insurers will push to access genetic testing results anytime soon. At the moment, they can access enough information for risk through family history and medical records.
Widespread access to life insurance is a good thing for both the consumer and the industry. Insurance providers should look to maintain the current availability for the end consumer in order to keep their businesses running.
For now, individuals do not need to disclose the results of a genetic test. This means they can then choose freely whether or not they would like one for their own use.
In order for people to still have access to life insurance, insurance providers need to handle genetic testing carefully. Yet, at the same time, don’t make people shy away from a test that could potentially save lives.