Insights
What the New Ban on Genetic Test Discrimination in Life Insurance Means for You
A new Government proposal seeks to ban life insurers from discriminating against individuals based on predictive genetic test results. This is a significant development in the use of genetic data in life insurance, addressing concerns over the accessibility of fair and affordable insurance for all Australians.
Predictive genetic tests can identify gene variants linked to inherited disorders that manifest later in life, though they are not clinically detectable at the time of testing. While these tests offer valuable insights, they have raised concerns about potential discrimination by life insurers, especially in the absence of a confirmed diagnosis.
Life Insurance and Genetic Testing
Life insurance in Australia is underwritten individually and based on assessed risks, meaning the cost of premiums reflects the unique risk profile of each individual. Most Australians are familiar with the routine questions regarding family medical history and personal health when applying for life cover.
Once a life insurance policy is underwritten and in place, the insurer cannot cancel or alter the cover as long as premiums are paid on time. Premiums, however, may change across a risk pool, often adjusting with age. This is why reviewing your policy is essential if health issues arise after the original policy was set.
In 2019, the life insurance industry introduced a partial moratorium on the use of genetic test results, limiting insurers from using them for certain types of cover under specific thresholds. However, as the following APRA data reveals, the moratorium limits fall well short of average insured sums:
| Policy Cover | Moratorium Limit | APRA Average |
| Death | $500,000 | $713,959 |
| Total Permanent Disability | $500,000 | $849,128 |
| Trauma and/or Critical Illness | $200,000 | $207,414 |
| Disability Income Insurance | $4,000* a month | $7,706 a month |
*any combination of income protection, salary continuance, or business expenses cover.
Genetic Test Discrimination
Despite the moratorium, many Australians remain concerned about taking genetic tests due to fears of higher insurance costs or outright rejection. The Monash University report, The Australian Genetics and Life Insurance Moratorium: Monitoring the Effectiveness and Response, revealed that 35% of individuals who had undergone genetic testing experienced difficulties obtaining life insurance. These issues ranged from policy rejections to increased premiums or the imposition of special conditions.
One particularly concerning case involved a 43-year-old woman with a BRCA2 gene variant, who, despite having no personal history of cancer and undergoing preventative surgery, was denied life cover entirely.
Government Response
In response to these ongoing concerns, the Australian Government has announced a complete ban on the use of predictive genetic test results in life insurance underwriting. This ban, subject to a five-year review, is intended to alleviate fears of discrimination and encourage more Australians to engage in genetic testing and research.
However, it’s important to note that this ban only applies to predictive genetic testing. Clinical diagnostic testing, used to confirm suspected conditions based on symptoms, will remain unaffected.
A Global Perspective
Australia is not alone in addressing the growing issue of genetic data use in insurance. In the UK, life insurers cannot use predictive genetic test results unless the result is favorable or voluntarily disclosed. Huntington’s disease is a specific exception for life cover above £500,000.
In Canada, the Genetic Non-Discrimination Act prohibits insurers from requesting or using genetic test results, though individuals can voluntarily provide results showing they are free from a genetic condition. Similarly, in the USA, the Genetic Information Nondiscrimination Act (GINA) prevents genetic data from being used in health insurance and employment contexts, though it doesn’t apply to life insurance. In Florida, however, life insurers are banned from using predictive genetic test results in underwriting decisions.
Get Informed on Your Life Insurance Options
As the landscape of life insurance continues to evolve, it’s essential to stay informed about how these changes may impact your cover. At Modoras, we are here to help you navigate these developments and ensure that your life insurance meets your needs. Contact us today for personalised advice on how this ban might benefit you or for assistance with reviewing your policy.
