In recent years, major advances in gene identification and genetic testing have added a new layer to how life insurance policies are underwritten. The big question is whether genetic test data can accurately predict a person’s mortality risk when they apply for life insurance and what this means for the industry. Right now, there are no laws stopping the use of genetic testing in the insurance process, and many companies are already using these tests to spot genes linked to conditions like Huntington’s disease and Duchenne muscular dystrophy, which are certain to develop if those genes are present. As technology quickly evolves, genetic testing is expected to cover even more diseases soon.
Genetic tests can reveal if someone is genetically prone to diseases such as Alzheimer’s, certain cancers, diabetes, and many other conditions. The impact of this is considerable. However, it’s important to note that current genetic tests only identify about 10 percent of known genetic diseases. Although the tests can highlight health risks, they don’t always guarantee that a person will develop the disease, as other factors like additional genes, lifestyle choices, diet, and the environment also play roles.
When it comes to consumers and life insurance premiums, genetic testing offers the benefit of reducing uncertainty, helping people plan for the future. However, there’s a concern among consumers about how insurance companies use this information. There’s fear that genes with unclear roles might be labeled as risk factors, leading to higher insurance costs. It raises ethical questions about whether insurers should charge higher premiums based on genetic possibilities. Critics suggest that genetic testing is supposed to help doctors treat and cure diseases, not discriminate against people.
Traditionally, life insurance underwriting is about assessing mortality risks, under the principle of “equal premiums for equal risks.” Since the industry’s early days, mortality tables have been used to justify premium adjustments, like charging men more than women of the same age due to lifespan differences. Life insurers may increase premiums by up to 40 percent based on family histories of congenital diseases.
Insurers claim genetic testing should be treated like any medical test and that its results should help assess mortality risk accurately. They also believe that knowing about a disease predisposition might encourage people to get more comprehensive coverage.
People might be discouraged from undergoing genetic testing if insurers can access those results, fearing higher premiums. This could hinder early disease diagnosis and treatment.
Research shows that insurance companies are already using genetic test results to discriminate. The Council for Responsible Genetics reports over 500 cases where individuals were denied jobs or lost insurance due to problematic genes, whether confirmed or suspected. The Genetic Information Nondiscrimination Act of 2008 prohibits genetic discrimination in health insurance and employment but not in life, disability, or long-term care insurance. Therefore, life insurers can request applicants’ medical records, including genetic tests.
On the flip side, people in good health without genetic disease predispositions might see no need for life insurance, potentially affecting the industry. Those with genes linked to Alzheimer’s, for example, might favor long-term care insurance, leaving life insurance for those with specific health risks, which would mean higher premiums.
Looking to the future, genetic testing is set to transform our world. We need to find ways for this technology to benefit consumers and insurers. Companies must adopt fair genetic underwriting practices. There needs to be a clearer scientific understanding of genetic risks and mortality rates. Public perception of genetics in life insurance should be considered, especially regarding what data insurers access, without compromising privacy.
Even though science and technology evolve and might tweak underwriting processes, you can still find great term life insurance policies online. Check out BBB-accredited websites linked to top-rated insurance providers for free quotes. Compare rates, company ratings, and terms to potentially save up to 70 percent by buying online.