Will group life trump adverse genetic testing? | Australian Markets

Group insurance coverage provided by way of superannuation would signify a means of people acquiring life insurance coverage cowl for people who’ve undertaken genetic testing and obtained a unfavourable consequence, in accordance with the Monetary Recommendation Affiliation of Australia (FAAA).

The FAAA has instructed Treasury it continues to favour a model the place the present moratorium on insurers utilizing genetic testing in life insurance coverage under sure caps is legislated, however with indexation of the thresholds.

“We think this would provide a sensible balance, allowing people with high risk genetic test results to still access life insurance, but not at a level that would unreasonably impact the life insurance pools and increase costs for existing life insurance policyholders,” it stated.

The submission stated that advocates of a full ban on the use of genetic testing, in contrast life insurance coverage with health insurance coverage, highlighting that health insurance coverage is community-rated however identified that the model “is not the norm in insurance”.

“In most forms of insurance, access to cover and the cost of premiums are determined by the level of risk and the insurer’s willingness to accept that category of risk,” it stated.

The submission additionally identified that life insurance coverage are permitted to take into consideration many kinds of risk reminiscent of weight, blood strain and former sicknesses and to have blood checks.

“Equally, it is accepted that applying for life insurance requires the disclosure of family history, particularly with respect to issues such as heart attacks, strokes and cancer,” it stated.

“Our key point is that it seems perverse that the ban on the use of relevant health information only applies to genetic testing, and not any other form of predictive health information. It would appear that this debate has been driven more from the perspective of promoting genetic testing specifically, rather than improving access and the affordability of life insurance,” the submission stated.

“It’s important to notice that after somebody has life insurance coverage in Australia, that it’s assured renewable. Which means as long because the policyholder continues to pay the premiums, they’ll retain the quilt, regardless of any deterioration of their health or later discovery of a risk issue.

“The life insurer cannot refuse to renew the cover just because the level of risk has increased significantly. For many people who have experienced a deterioration in their health, retaining their existing cover is a high priority. It is also the case, that people who already have cover, can already undertake genetic testing without the fear of losing their existing insurance as a result.”

“There are also other options for obtaining life insurance that do not involve the need for underwriting and disclosing a persons’ health status. Group superannuation schemes, or employer superannuation schemes offer insurance on what is known as an ‘automatic acceptance limit’ basis, where members can obtain cover up to a certain limit without needing to be underwritten,” the submission stated.

“This type of cover would still be available to people who have undertaken genetic testing and obtained a negative result. It is also available to those with a family history of medical conditions.”