Life insurance is incredibly important, providing reassurance in the event of your death, contraction of critical illness or terminal illness amongst other things. The policy will provide you and your loved ones with financial support in adverse circumstances.
Topically, the Association of British Insurers (ABI) has extended a ban which prevents insurers from using genetic testing to deny cover or increase insurance premiums. The restriction was due to run out in 2011 but has been extended until 2014. People have been worried about taking the tests in case insurance companies used the results against them.
There are fears that these new tests will create a “genetic underclass” that are uninsurable. In order to gain insurance, experts were worried that individuals would avoid taking tests that were important for their health.
The restriction was first agreed with the government in 2001 and states that insurers can only ask customers if they have had the testing I they require a policy to cover them for over £500,000. If the individual requests a policy over this amount then the company is allowed to ask for the test results. These tests are approved by the Government’s Genetics and Insurance Committee who has approved the tests for the brain degenerating Huntington’s disease. According to the Association of British Insurers, only 3% of policies requested in the UK are worth over £500,000.
The ABI states that insurance companies should be allowed access to any information which can help them assess and price fairly, the risk which potential customers may pose. However, the price for cover should be based on sound and extensive information. Customers are encouraged to admit to any diseases or illnesses that they have or have had and that run in the family. By admitting to these illnesses, insurers can price their policies accordingly. If customers do not admit these illnesses on beginning a new policy they may risk the insurance company paying out for more costly claims and pushing up prices for all in the future.
The ABI’s restriction (Moratorium) is designed to balance the concerns of policy holders and potential policy holders with a fair and commercially viable insurance market for all. The evidence insurers may gain from the genetic tests must be of a higher standard and be approved by an independent Government appointed committee.
The point of the Moratorium is to protect the interests of both insurance companies and their prospective customers. Insurance companies will be allowed access to information and customers will not be pressurised into taking these tests.
Steve is an author of several articles pertaining to Life Insurance. He is known for his expertise on the subject and on other Business and Finance related articles.
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Insurance companies are now allowed to consider the results of genetic test when underwriting policies. DNA samples will be permitted only in cases where the policyholder may have inherited the degenerative Huntington’s disease.
The decision of the expert advisory body reporting to the Government on genetics and insurance will open the door to the consideration of genetic test results for diseases which are inherited, including breast cancer.
Consumer groups and opposition MPs maintain that the introduction of DNA tests for insurance will create a group of people – the genetic underclass – who will be unable to get medical insurance cover.
A prime example of a group who will have to pay higher premiums and may never qualify for life insurance, are those inheriting the gene associated with Huntington’s, a terminal disease. Failure to disclose this disease to an insurance company following a DNA test would invalidate the cover.
The Liberal Democrat spokesman for health, Dr Peter Brand, says that not only is it going to be very difficult to regulate genetic testing, but it will create not only a genetic underclass, but also a health underclass. He maintains that although it is sensible to test when a genetic disease is treatable, it should be carried out confidentially, otherwise people won’t be able to sign up for mortgages and insurance.
An independent group of health professionals, geneticists and actuaries, known as the Genetics and Insurance Committee, has been established by the Department of Health, to assess genetic tests.
Hereditary breast cancer, myotonic dystrophy and Alzheimer’s disease are among nine diseases, which the Association of British Insurers (ABI) plans to request permission to include in a list of diseases for which genetic test results can be requested.
The National Consumer Council considers the granting of this application could be a backward step, as it will discourage people from applying for a test, which could be in their own interest.
Insurers will be told that they may consider genetic tests for Huntington’s when assessing life insurance cover, although not for mortgage protection and some other types of insurance cover. Cornhill and Standard Life do not consider the results from genetic testing when assessing a claim, although some insurance companies may do..
The Huntington’s Disease Association accepts that insurers must behave as ‘commercial companies’ Each person whose parent has Huntington’s disease is born with a 50-50 chance of inheriting the faulty gene. Anyone who inherits the faulty gene will, at some stage, develop the disease. A genetic test is available from Regional Genetic Clinics throughout the country. This test will usually be able to show whether someone has inherited the faulty gene, but it will not indicate the age at which they will develop the disease.50 per cent of people have a chance of inheriting Huntington’s from a parent who is diagnosed with the disease There are about 7000 people suffering from the illness in the country.
Juvenile Huntington’s Disease (JHD) refers to anyone who develops signs or symptoms of HD before they are 20 years old. It is a relatively rare condition and only about 5% of people affected with HD will develop symptoms this young. This can make it quite an isolating experience for the person affected by HD, their family, and any professionals that are helping them.
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Insurance policies may not be effected for the time being by the controversial subject of genetic testing following the Association of British Insurers recommendation that customers should not be asked by insurance companies for the results of genetic tests for the next five years.
Like many of ABI ‘s edicts, such as erasing the Raising Standards Initiative, it’s a voluntary as opposed to a compulsory code. Nevertheless it is excellent news. In practise, not many of ABI’s 400 insurers are likely to ignore the recommendations, as it would put their membership of the Association in jeopardy.
The low reliability of genetic tests available at present was recognised by the ABI. For example, simply because a member of their family died from cancer does not mean that they will contract the disease. However the Genetic and Insurance Committee (GAIC) still approves the test for Huntington’s disease as a reliable indicator when underwriting life insurance plans.
On life policies over £500,000, insurers may ask for the results or a genetic test for Huntington’s Disease. However ABI points out that only 3 per cent of all life policies are underwritten for over half a million pounds.
A Parliamentary select committee has expressed doubt about the relevance of the genetic testing for Huntington’s and has requested that GAIC reassesses their decision. It is important that this moratorium is used to debate the subject in depth rather than to use it as an excuse to ignore genetic testing for the next five years. Burying our heads in the sand will only exacerbate the situation, as advances in medical science will be used to develop much more reliable genetic tests within the next five years.
Insurers may then use genetic tests when underwriting policies, leaving us with a genetic underclass, who have difficulty in finding life insurance cover.
Certain insurers like the Co-operative Insurance Society, are suggesting a public/ private solution to solve the problem. They recently used an all encompassing moratorium on the underwriting of life insurance based upon the results of genetic tests. Using these tests will be expensive so it is only reasonable that the Government should share the burden with insurers.
An impartial complaints system will be established by the ABI so that consumers have adequate redress if they consider that the insurance companies have treated them unfairly. At present there are no details of how a system of this kind would work, but of course it needs to deliver solutions, which really deliver and be completely independent of the insurance industry. The ABI will police the moratorium themselves, which raises concerns about whether consumers will receive an unbiased hearing. The encouraging announcement by the ABI will be an empty promise if they don’t.
A Joint Statement of Concern has been presented to a House of Commons Cross Party Group. Forty six organisations and individuals have called upon the Government to legislate against the use of genetic test results in insurance.
They are concerned that there is no legal framework to prevent the use of genetic testing by employers and insurers to make decisions about who gets insurance. They also consider that testing is not a reliable or conclusive predictor of a person’s future health.
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