Changes to Genetic Testing in Life Insurance

Following industry consultation, the Financial Services Council has approved changes to Standard No.11 in relation to genetic testing.

The resulting moratorium limits the use of genetic test results when assessing applications for life insurance.

This means Australians now have access to life insurance without the need to disclose an adverse genetic test result and, where relevant, can choose to disclose a favourable test result.

The moratorium came into effect from 1 July 2019 and will be in place until at least June 2024. It will also be included in the updated Life Insurance Code of Practice.

The amount of combined retail and group cover in place or being applied for is considered before genetic test results can be used in the assessment. The moratorium limits are as follows:

• $500,000 Life and Total and Permanent Disability cover
• $200,000 Trauma cover
• $4,000 per month Income Protection and/or Business Expense cover

If the total cover exceeds these amounts an insurer may ask for results of a previously taken or planned genetic test only if the results are provided to the client. Genetic testing as part of research projects where individual results are not provided do not need to be disclosed.

Clients may wish to provide negative test results at any level of cover as this may allow more favourable insurance terms.

More information can be found here.