In September 2024, the Australian federal government announced that it will legislate to completely ban the use of genetic test results in underwriting life insurance. This is an important step which will enable people to undergo genetic tests without fear of the results being used against them when they apply for a life insurance product.
Historically, life insurance companies have been able to ask people whether they have undergone a genetic test result. This caused some people to be reluctant to undergo genetic testing because if they did, they might end up being unable to obtain life insurance, TPD or income protection insurance or might end up paying a lot more for their disability insurance products even when they weren’t sick and were completely asymptomatic.
This presented a real problem because it is important that people feel comfortable to get tested to understand their particular medical situation. It can literally be life-saving. 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, cystic fibrosis and others.
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 when seeking disability insurance.
The moratorium on the use of genetic tests
In 2019, a moratorium on the use of genetic tests was put in place by the life insurance industry. That was a good and important first step, but many people believed that the moratorium did not go far enough and was inadequate.
Under the moratorium, you did not need to disclose the results of a genetic test if you were applying for a life insurance product up to the following limits:
- $500,000 of death cover;
- $500,000 of total permanent disability cover;
- $200,000 of trauma/critical illness cover;
- $4,000 a month in total of income protection, salary continuance and/or business expenses cover.
There were concerns amongst consumer organisations that the above limits were too low and prevented people from being able to obtain sufficient life, TPD and income protection insurance which would be sufficient for their needs.
The announcement of legislation to totally ban the use of genetic testing in life insurance underwriting is a good and important step and brings Australia in line with other countries such as Canada. This means that the moratorium limits above will be abolished, and people will be able to apply for whatever amount of insurance cover they believe is suitable in their situation.
Total ban on the use of genetic tests
There are many conditions for which people seek genetic tests. Some of those conditions include Huntington’s disease, breast cancer and other cancers, cystic fibrosis and a number of other conditions.
On 30 June 2023, the A-GLIMMER report was produced. This was a large and important research project undertaken and led by Dr Jane Tiller of Monash University. The report undertook a review of the moratorium and its effectiveness. Ultimately, the report recommended a total ban on the use of genetic test results.
The life insurance products covered by the ban to be introduced on the use of genetic test results will include:
- life/death insurance;
- total and permanent disablement (TPD) insurance;
- income protection insurance;
- trauma/critical illness insurance.
Disclosure requirements when applying for insurance still apply
Importantly, consumers will still need to make disclosure to life insurers of any medical conditions which they have been diagnosed with and will still need to disclose their family history of certain medical histories when insurance companies ask.
As we have mentioned in our previous article, “Duty of disclosure in injury and illness insurance policies”, if people fail to disclose medical conditions which they have been diagnosed with or fail to disclose relevant family medical histories, it can have an impact on their ability to make a disability insurance claim. If someone breaches their duty to take reasonable care not to make a misrepresentation, an insurer may vary their insurance cover or void the insurance cover altogether and treat the insurance as if it never existed. Importantly, if this has happened to you, you should get advice as soon as possible.
Get help from a disability insurance lawyer
It is hoped that the legislation, once passed, will give greater confidence to Australians who wish to undertake potentially life-saving testing and to make informed decisions about their own health. In the meantime, if you have a dispute regarding your life insurance or any other disability insurance (TPD, income protection, trauma insurance, etc), get in touch for some free advice. At Berrill & Watson, it costs you nothing to find out where you stand.
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