Genetic Screening: Life Insurance's Double-Edged Sword

Genetic screening can be used against you when applying for life insurance. While the Genetic Information Nondiscrimination Act (GINA) of 2008 prohibits health insurance companies from using genetic information to make coverage or rate decisions, GINA protections do not extend to life insurance. This means there is no federal law that limits the use of genetic information by life insurance companies. However, some states have laws that provide extra consumer protections related to genetic testing and life insurance. For example, Florida is the only state that has enacted a genetic privacy law prohibiting life insurance companies from using genetic information to deny or limit coverage.

The Genetic Information Nondiscrimination Act (GINA)

GINA makes it illegal for health insurance providers to use genetic information when making decisions about a person's health insurance eligibility or coverage. This means that health insurance companies cannot use genetic test results to deny coverage or charge higher premiums. However, GINA does not apply to employers with fewer than 15 employees, and it does not cover other forms of insurance, such as life insurance, disability insurance, or long-term care insurance.

In the context of employment, GINA prohibits employers from using genetic information when making decisions about hiring, promotion, demotion, compensation, or any other terms or conditions of employment. It also restricts employers from requesting or requiring genetic information from employees or applicants, with a few narrow exceptions. These exceptions include situations where genetic information is inadvertently acquired, obtained as part of voluntary health or genetic services offered by the employer, or acquired through publicly available documents, among others.

GINA also addresses confidentiality, stating that genetic information should be kept confidential and in separate medical files. Additionally, it prohibits harassment or retaliation against individuals because of their genetic information.

While GINA provides important protections against genetic discrimination in health insurance and employment, it does not cover all types of insurance. As a result, individuals considering genetic testing should carefully weigh the potential benefits and risks, including the possible impact on insurance eligibility beyond the scope of GINA.

GINA's limited scope

In 2008, the Genetic Information Nondiscrimination Act (GINA) was passed in the United States, making it illegal for health insurance providers to use genetic information when making coverage or rate decisions. This means that health insurance companies cannot use the results of a direct-to-consumer genetic test to deny coverage or charge higher premiums.

However, GINA does not apply to other forms of insurance, including life insurance, disability insurance, and long-term care insurance. Therefore, while GINA provides protections for individuals seeking health insurance, its scope is limited and does not extend to other types of insurance.

In the context of life insurance, there is no federal law that prohibits the use of genetic information by insurance companies. This means that, in most states, life insurance companies can request and use genetic test results when evaluating applications and setting premium rates. This limited scope of GINA allows life insurance companies to access and consider genetic information when making underwriting decisions.

However, it is important to note that some states, such as Florida and California, have enacted their own laws to protect consumers in this regard. For example, Florida has a genetic privacy law that prohibits life insurance companies from using genetic information to deny, limit, or price coverage differently. Similarly, California's Genetic Information Privacy Act (GIPA) prohibits direct-to-consumer companies from disclosing genetic information to insurance companies for life insurance purposes.

While GINA's scope does not include life insurance, it is worth mentioning that existing life insurance policies cannot be affected by new genetic test results. This means that if you already have a life insurance policy and subsequently take a genetic test, the insurer cannot drop or change your coverage based on those results.

Life insurance underwriting

Medical Underwriting

Medical underwriting examines an individual's health and lifestyle factors, including age, medical history, habits, and occupation, to evaluate the risk they present to the insurer. It also involves a medical examination, facilitated by a certified paramedical professional, to confirm an applicant's health details. This includes routine assessments like measuring height and weight, checking blood pressure, and collecting blood and urine samples.

Financial Underwriting

Financial underwriting focuses on ensuring that the coverage amount aligns with the applicant's financial needs and circumstances. Insurers may review income, assets, liabilities, and other financial indicators, along with the applicant's credit history and existing insurance coverage. The objective is to determine that the policy's face amount is justified, preventing over-insurance and underlining the policy's role as a safety net rather than a financial windfall.

The Underwriting Process

The life insurance underwriting process typically takes two to eight weeks to complete and may be longer if the insurer has questions or is awaiting a response from the applicant's doctor. It involves several stages:

• Life insurance application: This includes basic information such as name, address, occupation, employer, net worth, physical attributes, and lifestyle choices.
• Life insurance medical exam: This confirms the applicant's health details and helps identify any underlying health issues.
• Information analysis: This phase involves scrutinizing prescription history, consulting the Medical Information Bureau (MIB) for discrepancies in medical history, and evaluating results from the medical exam, motor vehicle records, credit history, and even a background check.
• Insurance classification: The underwriter assigns an insurance classification rating, such as preferred plus, preferred, standard plus, standard, or substandard, indicating the applicant's insurability based on health and lifestyle factors.
• Premium determination: The premium is based on risk factors, including age, health status, occupation, gender, lifestyle, policy type, coverage amount, and credit standing.

Group vs. Individual Life Insurance Underwriting

When exploring life insurance options, individuals will encounter two common types: individual and group policies, each with distinct underwriting processes. Individual life insurance policies require a thorough underwriting process, including a medical exam and review of medical history. Group life insurance, offered as an employment benefit, simplifies the process by eliminating individual underwriting and standardizing premiums across the group.

Genetic Testing and Life Insurance

While federal law prohibits health insurance providers from using genetic information in coverage or rate decisions, this protection does not extend to life insurance. The Genetic Information Nondiscrimination Act (GINA) of 2008 does not apply to life insurance, and there is currently no federal law limiting the use of genetic information by life insurance companies. However, some states have enacted laws to protect consumers in this regard. For example, Florida has a genetic privacy law prohibiting life insurance companies from using genetic information for coverage or rate decisions, and Illinois and South Dakota require written consent to access direct-to-consumer genetic test results.

Family medical history

When applying for life insurance, the insurance company will ask about your family's medical history. This is because people with a family history of certain health conditions may be at a higher risk of developing those conditions themselves. The most common health conditions that insurers ask about include cancer, heart disease, kidney disease, and diabetes. They may also ask about conditions such as Alzheimer's disease, ALS, attempted suicide, and Huntington's disease.

Insurers will be particularly interested in your immediate family's medical history, i.e. your biological parents and siblings. They will consider how many members of your family have suffered from a certain condition and how early in life they were diagnosed. If a diagnosis came after the age of 60-65, this might be less of a concern for insurers.

If you have a family history of serious illnesses, you will still be able to get life insurance coverage, but you may have to pay higher premiums. However, your personal health profile and age are bigger factors in determining the cost of your life insurance.

It is important to be honest about your family's medical history on your life insurance application. Insurers will confirm your application against existing health records, and if they find out you lied or omitted information, this may invalidate your insurance and they may not pay out.

If you are adopted and are unsure of your family history, you should inform your life insurance company on your application. Your carrier will underwrite your life insurance policy based on your health history alone.

Privacy and discrimination concerns

The Genetic Information Nondiscrimination Act (GINA) of 2008 protects Americans from discrimination based on their genetic information in health insurance and employment. However, GINA does not apply to life insurance, disability insurance, or long-term care insurance. This means there is no federal law that limits the use of genetic information by life insurance companies. As a result, life insurance companies can use genetic test results when evaluating an application for life insurance. This raises concerns about privacy and potential discrimination.

Some states have enacted laws to address these concerns and protect consumers from genetic discrimination in life insurance. For example, Florida has a genetic privacy law that prohibits life insurance companies from using genetic information to deny, limit, or cancel coverage or set premium rates. California has also passed the "California Genetic Information Nondiscrimination Act" (CalGINA), which prohibits genetic discrimination in insurance and other areas such as housing and education. These state-level efforts provide additional protections for consumers beyond what is offered by GINA at the federal level.

The lack of comprehensive federal legislation on this issue has led to calls for more regulations to protect individuals' privacy and prevent discrimination. Consumer privacy advocates argue that genetic information is highly sensitive and that regulations are needed to limit insurance companies' use of such information. On the other hand, the insurance industry claims that consumers benefit when insurers have access to genetic information. They argue that life insurers want to sell as much insurance as possible at the lowest rate and that genetic information helps them accurately assess risk.

The debate around the use of genetic information by life insurance companies centres on balancing the need for consumer privacy and protection from discrimination with the need for accurate risk assessment by insurers. While some states have taken steps to address this issue, there is currently no federal law that comprehensively addresses the use of genetic information in life insurance underwriting, leaving some individuals concerned about the potential impact of genetic testing on their ability to obtain life insurance.

Frequently asked questions