Genetic test results will no longer impact life insurance applications
From 1 July 2019 Australians will be able to get up to $500,000 in life insurance cover without having to disclose an adverse genetic test result.
The Financial Services Council, the peak body for life insurers, will ban insurers from denying life insurance to people who withhold their genetic test results. This change will go into effect 1 July 2019. Life insurance products include death and disability, trauma and income protection insurance products.
Genetic testing, such as for the BRCA gene or Lynch Syndrome, can help people identify their disease and cancer risk factors, allowing them to make informed decisions on prevention and screening options. Currently, insurers can increase premiums based on genetic test results, or if people withhold their genetic testing results from insurers they can change the sum insured or void the policy altogether.
Up to now, this disadvantage leads to individuals deciding not to pursue genetic testing, or for people who have had genetic testing not to take out life insurance.
What does this mean for those considering genetic testing?
When the ban starts, people will be free to take out life insurance policies without having to disclose adverse genetic test results. Individuals can take part in genetic testing without fearing they won’t be able to take out life insurance.
The ban applies to levels of cover below a certain threshold. People will be able to access the following levels of cover before they will be required to disclose their test results:
- Death and total & permanent disability: $500,000 lump sum
- Trauma: $200,000 lump sum
- Income protection: $4,000 per month
The ban will be in place until 2024, and will be reviewed in 2022.
Genetic testing can be conducted through my practice. In my previous blog I discuss how reliable are genetic tests? Before I order a genetic test, it is important to understand the implications of genetic testing and we always discuss them in a proper consultation before patients have the test. I supervise the process through to delivery of the results.
Note: The change is not set to take place until 1 July 2019.
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