Australia's genetic testing and life insurance: gov seeks feedback
The Australian government is calling for public input on the 2019 moratorium related to genetic testing in life insurance. This policy specifically prohibits insurers from requiring applicants to undergo genetic testing. Additionally, it restricts insurers from demanding you disclose the results of existing genetic test results for policies under specific coverage limits.
The aim was to enable individuals to pursue genetic testing without worrying about it affecting their life insurance coverage or premiums. Despite these safeguards, there are concerns about the policy's real-world effectiveness.
What is genetic testing and why would it affect your insurance?
Genetic testing is a process that examines your DNA, the code in your cells that dictates everything from your eye colour to your health risks. These tests can identify if you're more likely to develop certain diseases or how you might react to different medications.
The impact of genetic testing on life insurance is significant, since insurance companies use various data to assess how risky it is to insure someone. If a genetic test shows a high chance of developing a serious health condition, insurers might view this as an increased risk. This could lead to higher insurance premiums or challenges in getting coverage. The current debate centres around the ethics of using such personal health data.
What does the current moratorium do?
The current moratorium on genetic testing in life insurance, introduced in Australia by the Financial Services Council (FSC) in 2019, sets specific limits on the use of genetic test results in the life insurance underwriting process.
The limits in the table below represent the maximum amount of coverage a person can apply for without having to disclose the results of any previous genetic tests:
| Type of Insurance Coverage | Maximum Coverage Without Disclosing Genetic Test Results |
| Death Cover | $500,000 |
| Total Permanent Disability (TPD) Cover | $500,000 |
| Trauma/Critical Illness Cover | $200,000 |
| Income Protection/Salary Continuance/Business Expenses Cover | $4,000 per month |
Effective from 1 July 2019, the moratorium specifically governs new life insurance applications and does not impact existing policies.
Under this rule, if your application is for coverage amounts below the specified limits in the table, and you have previously undergone genetic testing, there is no obligation to disclose those test results to your insurer. On the other hand, for coverage amounts above these limits, insurers may request to see the test results of any previous genetic tests you may have taken.
Furthermore, insurers are not permitted to insist or even suggest that you undergo genetic testing as a part of your application, irrespective of the coverage amount.
Additionally, you always have the option to voluntarily share favourable genetic test results, whether your coverage is above or below the specified limits. This policy is designed to promote genetic testing for health reasons, free from concerns about its impact on insurance, and is set to remain in effect until at least 30 June 2024.