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Implications for Life Insurance

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Background: The potential implications for life insurance applications have always been a consideration with genetic and genomic testing. This changed somewhat with the July 2019 introduction of the Moratorium on Genetic Tests in Life Insurance by the Financial Services Council (FSC).  The introduction of the moratorium means that up until at least 30th June 2024, life insurance companies will no longer be able to use genetic and genomic testing information as part of insurance applications up to certain cover limit amounts.

Learning Objectives 

After reviewing the Key Information, Consent Form Information and referring to the Fact Sheets & Key Resources, you should be able to:

1. Identify which common types of insurance are risk-rated and the relevance to personal health information.

2. Understand the key components of the FSC Moratorium on Genetic Tests in Life Insurance.

3. Identify the relevant statement on your state or national clinical consent form.

Key information

Most life insurance products such as cover for death, permanent disability, trauma and income protection are based on a risk assessment and as such, companies base an offer and policy cost on the level of risk being taken on. In Australia, private health insurance premiums are not risk-rated, so everyone pays the same premiums for the same policy, regardless of their age or health status and individuals do not have to provide any genomic test information to the company when applying.

Up until recently, life insurance applications forms required individuals to divulge genetic and genomic testing information, such as whether they had undergone genomic testing and what the results were. On the 1st of July 2019, this changed somewhat, with the introduction of the Moratorium on Genetic Tests in Life Insurance; in place until at least 30th June 2024. The Moratorium allows individuals to be able to apply for a certain level of life insurance without having to disclose the results of a previously taken genomic test. They can however disclose a favourable test result. Disclosure of other personal medical history and medical conditions present in first-degree family members is still required. Therefore, whilst the moratorium will benefit some, others may still have difficulty obtaining a life insurance policy or will do so at a premium due to these other factors. A favourable genetic test result may offset a positive family history.

All companies currently issuing life insurance products in Australia are members of the FSC and as such are obliged to follow the FSC Standards and Life Insurance Code of Practice. The Moratorium will be reviewed in 2022 at which time a decision about continuation past June 2024 will be made. Please consult the Fact Sheets and Key Resources  below for further information.

Fact Sheets and Key Resources
Consent Form

For the Australian Genomics (National Clinical Consent Form); the sentence “Results from these tests may affect my ability to obtain some types of insurance” is located on the first page.

For the new NSW Genetic Testing (& Genomic Testing) Consent Form; the sentence “The genetic test results may affect my/my child’s ability to obtain some types of insurance (for example, life insurance)” is located within the first half of the second page.

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Fact Sheets and Resources

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