Genetic Testing May Affect Your Life Insurance

When Melissa Taylor was tested for the BRCA1 gene mutation, nobody told her it could affect her financially. The 48-year-old, who had already beaten breast cancer at 31 and again at 46 and who had also lost an aunt to the disease, was found to carry the gene after taking the test two years ago.

After receiving her results, Ms Taylor underwent a double mastectomy and had her ovaries and fallopian tubes removed. She was told by doctors she now has the same level of risk of getting another type of cancer in future as anyone else in the community.

But even though Ms Taylor has taken such drastic and effective measures to reduce her risk, insurers are still able to increase the price of a policy or deny her cover altogether.

That’s because at the moment, Australian insurers are able to raise life insurance premiums or withhold policies for people who have had a genetic test that’s come back positive.

Australians are also legally obliged to let their insurers know if they’ve had genetic testing, and if they withhold information, it can even be considered insurance fraud.

Ms Taylor’s daughter Anneka, 23, decided to be tested despite the insurance ramifications, and thankfully, her test came back negative. But Ms Taylor, who lives in the NSW Blue Mountains, is worried the insurance loophole could cost other Australian lives.

“I think it’s unfair for people who have the gene mutation to go through all that to get rid of the risk — and it is a very big deal — only to have insurance companies use that as a reason to not give them the same level of cover,” she said.

“I would hope this doesn’t turn people off having genetic testing because it really does save people’s lives. The surgery I’ve had is going to save my life and I hate to think people won’t do that because they’re worried it will make other areas of their life trickier. It would be terrible if people put off getting testing done because of this reason, particularly younger women.”

Like 91 per cent of Australians, Ms Taylor had “no idea” taking a genetic test could affect her life insurance.

According to new research - more than 17.4 million adults are in the dark about the fact that insurers can increase premiums if a genetic condition is disclosed. The research found 13 per cent of Australians have taken a genetic test, with 2.5 per cent taking a specific test for cancer.

Males were slightly more likely to have had a genetic test than females, and Victorians are the most likely state to have been tested with 16 per cent of the population taking one, compared with 11 per cent of residents from NSW.

Insurance expert said people needed to be aware that testing could increase the cost of life insurance premiums or even allow insurers to reject cover.

Although life insurance brands don’t initiate genetic tests before approving cover, they can ask for the results of existing tests, and applicants are obliged to let providers know if they’re aware of any previous diagnoses. With an enormous nine in 10 Australians unaware of how genetic testing can affect their life insurance, there is clearly a need for better education.

Policyholders might not realise they had a legal obligation to inform their insurer of any tests they’ve done. Insurers are obliged to provide alternatives if they reject your life insurance or income protection application so approach them for options if they don’t.

Earlier this year, a parliamentary inquiry recommended life insurance companies be banned from using genetic testing to determine a client’s insurance coverage.