How genetic testing can affect your life insurance rates

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Colin LalleyContent Director, Home & Auto InsuranceColin Lalley is the content director for home and auto insurance at Policygenius, where he's been writing about insurance since 2015. His insights have been featured in Inc. Magazine, Betterment, Chime, Credit Seasame, Zola, and the Council for Disability Awareness.

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Recent breakthroughs in genetic testing are helping people pro-actively address potential health risks—but if you’re shopping for life insurance, you may want to hold off on genetic testing until after you apply.

The Genetic Information Nondiscrimination Act passed in 2008 after more than a decade of being fought for by advocacy groups. GINA keeps health insurance companies and employers from discriminating on the basis of information that might be found in a genetic screening. The Affordable Care Act explicitly protects against discrimination not only of pre-existing conditions, but of pre-existing conditions that are found as a result of genetic testing. But just because the results of genetic testing can’t be used in health insurance and employment doesn’t mean it can’t be used against you.

That’s because health insurance and employment are really the only two protected areas. Many people haven’t heard of GINA, and one study showed that of those who have heard of it, 23% thought – incorrectly – that its protection included antidiscrimination in life insurance, disability and long-term care insurance.

Unfortunately that’s not true. Insurance products outside of health insurance, such as life insurance, can use the results of genetic testing to impact applicants’ rates. (You can find out how much life insurance costs here.) That’s becoming a bigger issue as genetic testing moves out of the medical labs and into homes; 23andMe has been given approval by the FDA to provide disease analysis with its home tests, meaning there’s a whole new market for people to find out what’s hidden in their genetic code.

They might not like what they find – whether it’s a medical condition, or what it does to their life insurance rates.

Why genetic testing is a problem for life insurance

Here’s how the life insurance application process normally works:

You apply for life insurance. After you do, you go through the underwriting process. (Here's how it works.) That’s how the life insurance company decides how risky you are to insure; that is, how likely you are to die while you have your policy, and therefore how likely the company is to pay out.

How do they do this? By looking at everything from your current health to your (and your family’s) health history to your driving record to your hobbies. More likely to die? More likely to pay higher rates for your policy.

You can probably guess where this is headed: if you have a genetic screening that turns up something the life insurance company doesn’t like, they’ll raise your premiums or even flat out deny you.

It’s important to note that a life insurance company won’t always have genetic screening information. If a test is done through a physician, it’ll be part of your medical history; if you’re using a consumer genetic testing kit, you have to trust that they’ll keep your results secure. But, what isn’t required now may be in the future.

And this isn’t hypothetical—it’s a reality for many people.

That might seem reasonable – if you’re at a higher risk of cancer due to family history and you’re judged on that criteria, why not apply the same logic to genetic testing? But in reality patients should be rewarded for pursuing genetic screening that allows them to catch medical conditions. Not everyone with a gene mutation develops cancer, and being aware of it means that applicants take the necessary precautionary measures, like MRIs, mammograms, or mastectomies, to decrease their risk. Here's how cancer and life insurance work.

Life insurance carriers reward this approach to early detection and prevention when it comes to other conditions: If an applicant has diabetes, for example, but shows that they’re controlling their condition, they can get competitive rates. But you might not even get to the preventative measures step if the condition is one you found out about through a genetic test.

America isn’t the only country that penalizes genetic testing, but other countries like Belgium, France, and Norway "have chosen to adopt laws to prevent or limit insurers' access to genetic data for life insurance underwriting."

What’s worse, it’s not even clear that this type of genetic discrimination is necessary. According to some experts, "few applicants would move into or out of standard risk pools because genomic information about currently known common variants seldom substantially affects mortality risk estimation already based on phenotype and family history," and "there is at present insufficient benefit to warrant the addition of predictive genomic data to actuarial risk stratification models."

What does that mean? Basically, genetic screening may provide a different way for discovering health information, but, for the purposes of life insurance underwriting, the information itself shouldn’t greatly impact a person’s risk classification. There’s nothing that should be more alarming than what’s already uncovered during the existing underwriting process.

That just leaves the question of why we’re considering genetic testing results at all when it comes to life insurance.

The unintended consequences of genetic testing penalties

Negative life insurance experiences aren’t the only consequences of genetic testing. It also plays a role in our health insurance, the workplace, and our medical research.

"But wait," you say, "I thought genetic testing results were specifically protected from health insurance and employment decisions?"

They are! Except that this bill is looking to exploit a loophole in the form of workplace wellness benefits.

Workplace wellness benefits are provided by an employer (or, more specifically, the insurer) that are ostensibly used to entice people to be healthier by offering rewards. Employees pay less for insurance, the insurer pays less for medical claims. It’s a win-win.

But not everyone is on board with wellness programs, and genetic testing is just another weapon in detractors’ arsenal now that they’re commonly being included in these programs. Concerned about your genetic data being out there because, say, it might disqualify you from life insurance coverage? That’s fine – you don’t have to get savings on your health insurance premiums. It’s one of the main concerns about wellness programs – that those who choose to not take part are essentially being penalized – taken to a much more intimate level.

And it isn’t technically violating GINA because you’re not being charged more for your health; you’re just not being charged less.

The second unintended consequence involves medical research. One of the main sources of data for medical research is looking at real life patients. But with potential penalties on the horizon, projects that involve genetic sequencing or screenings find it hard to find participants because of fears that the information gathered might be used against them by life insurance companies.

One study that really highlights this problem? A recent Rock Health report shows that only 38% of people are willing to share their genetic information with insurers, while 65% were willing to share it with Google.

When people are more open to giving genetic testing information to a company that literally makes money by exploiting our personal data than to an insurance company, maybe it’s time to rethink our stance on using genetic screening data in life insurance applications.

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