While the benefits of life insurance can be significant in a beneficiary’s life, securing the right type of life insurance that is worth the cost is not always a straightforward task. This is because life insurance companies review several factors when determining who is eligible for life insurance coverage—and who is not.
The underwriting guidelines the majority of life insurance providers use as part of the application process for a new life insurance policy involve an in-depth review of several items. These include medical history, family history, gender, age, smoking status, current health conditions, and prescription medication use.
In recent years, genetic testing, which connects an individual’s genetic makeup to his or her potential health risks, has become a topic of discussion among insurance providers and those applying for coverage. While genetic testing (whether ordered by your physician or an at-home DNA test kit like 23andMe) offers valuable insight into one’s medical past, present, and future, it may be used in your life insurance underwriting process.
Here are several things you need to know about genetic testing and its impact on your life insurance application.
The Genetic Information Nondiscrimination Act (2008)
In 2008, the Genetic Information Nondiscrimination Act, referred to as GINA, was passed into law. It prohibits discrimination by employers and health insurance companies based on an individual’s voluntary participation in genetic testing.
The law was intended to be a sweeping antidiscrimination measure, limiting the misuse of genetic testing data among individuals seeking out employment or health insurance coverage. While GINA offers some promise in protecting consumers against genetic discrimination, many misunderstand its scope in the realm of life insurance.
GINA does not impact life insurance companies the way it does employers and health insurers. There is no law stating that insurance companies offering life insurance coverage cannot use genetic information to determine the health rating of an applicant. (Genetic test results might also have an impact on disability insurance and long-term care insurance.)
This means that as genetic testing becomes more common among adults, life insurance providers may opt to lean more heavily on genetic testing kits’ data to evaluate risk and, ultimately, the price of insurance coverage. Individuals with pre-existing conditions or genetic diseases (for example, people who have the BRCA1 gene or show a potential for inherited Parkinson’s disease) may be priced out of getting coverage while others might be declined altogether.
Will Life Insurance Companies Consider Previous Genetic Tests?
Each insurance company uses its own underwriting guidelines to determine the risk an applicant presents. Some providers focus more on current health status or smoking habits, while others rely more heavily on family history and previous medical conditions. No two insurance companies are the same in how they evaluate risk, but genetic testing, up until this point, has remained a minimal consideration for most major life insurance companies.
Even though genetic test results are not currently being used by many life insurers to determine the price or approval of new applicants, several factors play a role in the underwriting process now. Family history is strongly considered.
This means if a family member has had a serious medical condition, including diabetes, cardiovascular disease, or cancer, you are automatically considered to be a higher risk to an insurance provider. Essentially, any health condition that reduces your lifespan creates a greater risk for the insurance company having to pay out your life insurance benefit.
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How Can Genetic Tests Influence Your Life Insurance Rate?
Genetic screening is not currently a requirement for life insurance applications, regardless of the amount, type, or term of coverage. However, some medical questionnaires as part of the underwriting process do ask if you have had any genetic screenings or testing completed in the past.
If you have, you may be asked to share that information with the life insurance company as part of its underwriting review. Furthermore, any results from genetic testing ordered by your physician will likely be in your medical records. If there are indicators of a future health condition that could reduce your mortality, a life insurance company could, in theory, increase your premium cost or reduce the total death benefit offered.
It may be common for those applying for life insurance to simply avoid answering this question or be less than truthful when completing a medical information questionnaire. While this may lead to faster approval and lower cost of insurance, life insurance companies have the right to evaluate your application and medical history should you pass away before paying out a death benefit.
Lying about family medical history, genetic testing, or other health conditions puts you and your loved ones at a disadvantage when it comes to life insurance coverage. It is recommended to provide the full details of any medical conditions and genetic testing, if asked, to avoid complications or declines in the future.
There are more than 1,000 genetic tests currently available to consumers in the United States today, with more being developed each year. Although their popularity is soaring, the use of genetic testing brings about serious privacy and discrimination concerns for government watchdogs and regulatory agencies.
Currently, there is no federal law in place protecting consumers from having their genetic testing information shared with life insurance providers for the purpose of evaluating an insurance application. The laws only extend to employment and health insurance applications.
The future of genetic testing remains unclear as it relates to these pressing issues, but individuals in need of life insurance can take steps to improve their chances of getting approved for the coverage they need now.
Being honest about medical history, current conditions, prescription drug use, and family history is the best course of action when applying for life insurance coverage. Insurance companies have several ways to evaluate risk, and in most cases, approval is possible with the right provider.
Be sure to compare your options for life insurance coverage before accepting a policy, including the amount, term length, and price. If you are concerned about the possibility of being susceptible to genetic discrimination in the underwriting process, it may be best to wait to complete screening until after your life insurance is approved.