Life Insurance and Genetic Testing / DNA Testing

Genetic Testing: Background

Genetic testing (also called DNA testing), as a scientific procedure, involves examining a person’s DNA—the special molecules that dictate how our bodies form and function. This testing can reveal changes or mutations in genes that may cause illness or disease. Genetic tests are available for a variety of diseases such as cancer, cardiovascular disease, neurological disorders, and rare genetic conditions. These tests can not only provide information about a person’s risk of developing certain health conditions but also help identify carriers of inherited diseases who might pass them on to their children.

Life insurance is a contract between an individual and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. The premium, or cost of the insurance policy, is determined based on various factors. These factors include age, gender, lifestyle, occupation, medical history, and family history. Family history is an important factor because some health conditions, such as heart disease, diabetes, and certain types of cancer, have a genetic component and can run in families.

Given the role of genetics in health, it’s not surprising that the topic of DNA testing has found its way into the realm of insurance. When individuals undergo genetic testing and the results indicate a predisposition to certain diseases, insurance companies could categorize them as high risk. This could lead to higher premiums or even denial of coverage. Conversely, if DNA test results show no indications of genetic diseases, the individual might be considered low risk, potentially leading to lower premiums.

This intersection of genetic testing and insurance has sparked a debate about genetic discrimination. Advocates argue that legislation is needed to protect individuals from being unfairly treated based on their genetic information. The issue raises important questions about privacy, fairness, and the balance between risk and protection in the insurance industry.

How do your genetics play a role when underwriting a life insurance application?

Since the introduction of Bill S-201, also known as the Genetic Non-Discrimination Act, there has been a significant change in the way insurance companies assess risk. This legislation prevents insurers from requiring individuals to undergo genetic testing or using genetic test results for risk assessment purposes. This means that an individual’s genetic predisposition to certain health conditions can no longer be considered when determining insurance premiums or coverage.

However, it’s important to note that while genetic testing results are protected under this act, family history is not. Family medical history continues to play a significant role in the risk assessment process. This includes information about health conditions that have occurred in an individual’s immediate family, such as heart disease or cancer, which might indicate a higher risk of developing the same conditions.

The full wording of Bill S-201 stipulates that it is prohibited for any person to require an individual to undergo a genetic test as a condition of providing goods or services to that individual, entering into or continuing a contract or agreement with that individual, or offering or continuing specific terms or conditions in a contract or agreement with that individual.

Which genetic questions do life insurance companies ask?

Insurance companies do not ask questions about genetic testing or the results. Almost every company will even specify to not give any information related to DNA testing. They will, however, most likely ask a question about your family history and can use that information to in to arrive at a decision. 

Do genetic questions very depend on the type of insurance e.g. life insurance, versus critical illness insurance versus disability insurance?

Typically, insurers will have a standard family history question that applies to all lines of business. The answer will have more or less impact depending on the line of business. Usually, critical illness and disability insurance guidelines will be more stringent than those that are applied for life insurance. 

Do insurance companies ask a question about DNA tests for insurance purposes?

No, they are not allowed to do so and will even specify to not provide any information regarding genetic testing. 

In terms of family history, have there been any changes in how companies assess risk in the past few years?

There has been a very interesting change in the last year regarding how some companies assess critical illness insurance risk.  In the past, it was usually common practice to only offer an exclusion related to the family history (assuming it was concerning from an underwriting perspective), however some companies will now offer a rating rather than an exclusion.

It’s always best to reach out to each company individually to see which approach they take, however even though a rating ends up costing more it still allows you to get full coverage and still cover cancer if that condition is associated with your family history. 

For example, a female in her 40s whose mother had breast cancer prior to age 50 and has been compliant with routine screening (with normal results) could get coverage with a small rating rather than having breast and/or ovarian cancer completely excluded from the contract.

Again, not every company will offer this option but it’s worth looking into if your client prefers a rating rather than an exclusion for critical illness coverage. 

CLHIA’s Stance on Genetic Testing and Life Insurance

The Canadian Life and Health Insurance Association (CLHIA) has expressed a nuanced stance on the issue of genetic testing and insurance. The CLHIA acknowledges the importance of genetic testing in medical diagnosis, treatment, and preventive health care. However, it also emphasizes that life insurers do not require applicants to undergo genetic testing. But if such tests have already been done and the results are available to the applicant, the CLHIA believes that this information should be shared with the insurers. They argue that this is crucial for the risk assessment process, which enables insurers to set fair and accurate premiums. However, these positions may evolve over time, so it’s always a good idea to check the most recent updates on the CLHIA website.

Life Insurance and Genetic Testing: Final Word

In the evolving landscape of genetic testing and its impact on life insurance, understanding what this means for you can be complex. The intersection of genetics, health, and insurance raises important questions about risk assessment, fairness, and privacy. Whether you’ve undergone DNA testing or are considering it, it’s crucial to know your rights and how your information can be used.

Our team of experienced insurance professionals is here to help guide you through these complexities. We can provide you with the most up-to-date information, clarify any doubts, and help you make an informed decision about your insurance needs (both standard life insurance and no medical life insurance products). Don’t navigate this challenging terrain alone. Reach out to us today to ensure you’re fully protected and fairly treated when it comes to your life insurance coverage.