How Can Genetic Discrimination Affect Your Life Insurance?

As the popularity of gene testing continues to grow, consumers should be aware of a potential consequence: Australian insurance companies may use the results to discriminate when it comes to coverage options. The Consumer Action Law Centre has warned consumers that some insurers may determine it’s too expensive to insure someone with a pre-existing condition — even if it has not and may not manifest.

Life insurance companies in Australia have the legal right to ask if an insurance applicant has had or plans to have genetic testing done. The results of these tests can then be used to calculate the applicant’s risk to deny or approve coverage. Insurance companies are effectively allowed to use genetic results to discriminate against applicants for permanent disability, life, and income protection insurance, all of which fall under the category of life insurance.

In addition to denying coverage based on the results of gene testing, insurers may also increase premiums or exclude insurance cover for specific conditions like cancer. Consumers who take out a life insurance policy and later get gene testing may be blocked from making an insurance claim.

These decisions can be based on results from approved clinical genetic tests as well as direct-to-consumer genetic tests, which may not be as reliable. These tests are typically used to determine whether a patient’s genetics may leave them at higher risk of medical conditions like cystic fibrosis, cancer, or Alzheimer’s disease.

Under current regulations, the results of any clinical tests must be disclosed to an insurer. The Australian insurance industry is self-regulated by the Financial Services Council. The FSC’s position is insurance companies need to be informed of genetic information to make informed insurance decisions as insurance is an inherently risk-based industry.

According to some genetic researchers, companies that refuse insurance for people with genetic disorders can threaten medical research. This is one reason that the practice has been at least temporarily banned in countries like Canada and the UK as it discourages consumers from genetic testing that can lead to medical breakthroughs. In the United Kingdom, for example, a moratorium in 2001 created an agreement by which the insurance industry may not ask for or use genetic test results. The only exception is Huntington’s Disease for policies that are worth more than £500,000.

A policy paper recently published by Dr. Lacaze of the Monash University Public Health Genomics and colleagues argues that the insurance agency should not self-regulate while calling for greater oversight by the government. The Australian Federal Government is already holding an inquiry into the industry with a report expected in early 2018.