The rules around genetic testing and life insurance have changed a few times over the years. Approximately 10 years ago, the life insurance industry adopted a practice that they would not require life insurance applicants to do a genetic test, although they could rely on existing genetic test to decide whether to insure someone.
But a big change came into effect in July 2019.
Moratorium on use of genetic test results through to 2024
From 1 July 2019 to 30 June 2024, life insurers have agreed not to use genetic test results as part of life insurance application assessments for:
- death and total & permanent disability (TPD) policies up to $500,000;
- trauma policies up to $200,000; and
- income protection policies up to $4,000 per month.
For policies with values above these amounts, genetic test results can be used by life insurers in deciding whether and on what terms to cover you.
What life insurance is covered by the moratorium?
Most Australians have life insurance as part of their employment superannuation.
Most insurance in super is provided on an ‘automatic acceptance’ basis up to monetary limits.
This means that you don't have to fill in a health questionnaire to get cover and you won’t be asked questions about any pre-existing conditions, genetic tests or family history. The only eligibility question is usually whether you are ‘at work’ when you joined the fund.
If you want to get extra cover, you may then have to fill in a questionnaire and genetic test questions might be asked.
If you have private insurance sold by a broker, agent or online, you will usually have to provide information about your health for the insurer to work out if you are an acceptable risk.
This may include questions about your age, sex, medical history, lifestyle and immediate family history.
If you have group insurance provided by your employer or an association, you may not have to fill in a health questionnaire but under some group policies, pre-existing conditions are excluded.
Because of the self-imposed restrictions in place from July 2019 to June 2024, life insurers won’t:
- ask you to undergo a genetic test; or
- use existing genetic test results for any applications up to $500,000 for death, terminal illness or TPD cover, $200,000 for trauma insurance and up to $4,000 per month for income protection.
Existing policies in place before July 2019 are not covered by the moratorium
If you have an existing life insurance policy which started before 1 July 2019, the moratorium does not apply. But nor do you have to tell the insurer about any genetic test results or changes to your health after the life insurance policy starts.
As long as you keep paying the premiums, the insurer must keep covering you and not cancel the cover if your situation changes.
If you get a genetic test after the policy starts and the test result shows you don’t have a faulty gene, you may be able to get the policy modified.
If you have any questions about genetic testing and any life insurance application or need help with a death benefit, TPD, income protection or trauma insurance claim, contact John Berrill for FREE advice.
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