Content updated January 2024
The rules around genetic testing and life insurance applications have changed a few times over the years. In October 2022, the Life Insurance Code of Practice (a code which tells almost all life insurers how they must behave when dealing with peoples’ life insurance products), was amended to make the existing restrictions on when genetic testing can be requested in response to an application for insurance ongoing.
What are the restrictions on insurers’ use of genetic testing
From 1 July 2019 to 30 June 2024, life insurers agreed on a moratorium on the use of genetic test results through to 2024.
This moratorium has been continued on an ongoing basis under the Life Insurance Code of Practice. It prevents life insurers from requesting genetic test results as part of life insurance application assessments for:
- death and total & permanent disability (TPD) policies up to $500,000;
- trauma policies up to $200,000; and
- income protection policies up to $4,000 per month.
The restrictions do not apply outside of these caps and for policies with values above these amounts.
Genetic test results can be requested and used by life insurers in deciding whether and on what terms to cover you. This means that if your test results show that you are at an increased risk of developing, for example, cancer, claims for cancer may be excluded when your policy application is accepted. The results can also be relied on to reject your application for life insurance if you are deemed to be an unacceptable risk.
We understand that some insurers are not always aware of these restrictions and sometimes make the request for genetic testing as a matter of course. If you are applying for insurance cover which is less than the above figures, you can deny a request for genetic testing. But if you are applying for cover above the figures, you should comply.
Importantly, insurers are not allowed to ask you to undergo (or encourage you to undergo) genetic testing as part of any insurance application.
What life insurance is covered by the genetic testing moratorium?
Superannuation
Most Australians have life insurance as part of their employment superannuation.
You might be covered for death, TPD or terminal illness lump sums and monthly income protection payments. Trauma benefit lump sums aren’t part of super.
Most insurance in super is provided on an ‘automatic acceptance’ basis up to monetary limits.
This means that you don't have to fill in a health questionnaire to get cover, and you won’t be asked questions about any pre-existing conditions, genetic tests or family history. The only eligibility question is usually whether you are "at work" when you joined the fund.
If you want to get extra cover, you may then have to fill in a questionnaire and genetic test questions might be asked if the combined amounts that you are seeking increased cover for will exceed the relevant thresholds.
Private insurance
If you have private insurance sold by a broker, agent or online, you will usually have to provide information about your health for the insurer to work out if you are an acceptable risk.
This may include questions about your age, sex, medical history, lifestyle and immediate family history.
If you have group insurance provided by your employer or an association, you may not have to fill in a health questionnaire but under some group policies, pre-existing conditions are excluded.
Issues relating to genetic testing and these protections apply to private insurance.
Why prevent insurer access to genetic testing?
The results of genetic testing are a useful determinant of your future health and likelihood of contracting illnesses, which means that these results are very useful to insurers but also critically important in the fight against serious illnesses (like cancer).
Therefore, on the one hand, we want insurers to be able to make informed decisions about whether to provide people with life insurance cover, but on the other hand, we do not want to deter people from undergoing genetic testing to lengthen their lives (and improve their quality of life) due to concerns that the testing will be used against them.
Existing life insurance policies in place before July 2019 are not covered by these protections
If you have an existing life insurance policy which started before 1 July 2019, the restrictions do not apply. But nor do you have to tell the insurer about any genetic test results or changes to your health after the life insurance policy starts.
As long as you keep paying the premiums, the insurer must keep covering you and not cancel the cover if your situation changes. This is because life insurance products in Australia are guaranteed renewable policies.
If you get a genetic test after the policy starts and the test result shows you don’t have a faulty gene, you may be able to get the policy modified.
Insurance companies and genetic testing protections
In summary, because of the self-imposed restrictions in place, life insurers are not allowed to:
- ask you to undergo a genetic test; or
- use existing genetic test results for any applications up to $500,000 for death, terminal illness or TPD cover, $200,000 for trauma insurance and up to $4,000 per month for income protection.
Making these restrictions on the use of genetic test results permanent is a positive step. However, we think the caps are too low, which means that most people that apply for insurance cover would not get any benefit from the restrictions.
This is because most people that apply for insurance cover for any of the above products, will usually apply for cover higher than existing caps.
The process and protections relating to genetic testing are soon to be subject to a review which we hope increases these thresholds.
Get help from an insurance lawyer
If you have any questions about genetic testing and life insurance applications or need help with a death benefit, TPD, income protection, or trauma insurance claim, contact us for FREE advice.
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