Genetic testing and your insurance

Editor’s note: In May 2017, the federal government passed legislation that makes it illegal to require a person to undergo genetic testing or to disclose results of previous genetic tests as condition for insurance coverage.

Angelina Jolie Pitt made headlines in May of 2013, and again in early 2015, when she disclosed that she carried the BRCA1 genetic mutation. As a result, she had a sharply increased likelihood of developing breast and ovarian cancers — 87% and 50%, respectively. Based on that information, the actress and director decided in 2013 to have her breasts removed prophylactically; in March 2015, she had surgery to remove her ovaries and drastically reduce her risk of developing ovarian cancer.

Jolie Pitt’s story shed light on the risks and benefits of genetic testing from personal and medical points of view. But a decision to undergo genetic testing can also have significant effects in another area: the ability to qualify for life, critical illness and disability insurance, not to mention the costs of these products.

Thousands of genes have been identified that relate to illness, and more are discovered all the time. Only about a dozen, however — including BRCA1, as well as genes related to conditions like Huntington’s disease, early onset Alzheimer’s, some forms of colorectal cancer, and hypertrophic cardiomyopathy — are currently understood well enough to be taken into account by insurers. (According to a 2014 study by the Canadian Institute of Actuaries, fewer than 5% of applicants are declined insurance outright for these sorts of conditions.)

Insurance underwriting is essentially a process of assessing risk, explains actuary George Graziani, senior vice-president and head of longevity for Swiss Re in North America. If genetic testing reveals a mutation that substantially increases your chances of developing a serious illness or dying prematurely, insurers may “rate” your policy: in other words, charge you more than they would someone deemed a standard risk.

Carrying a potentially damaging mutation, Graziani points out, is only one of many reasons why a policy might be rated: a strong family history of disease, risky behaviours like smoking or skydiving, or other, pre-existing health conditions may all cause someone to be charged a higher premium.

Getting tested

Deciding to be tested, though, is a personal decision, says Frank Zinatelli, vice president and general counsel of the Canadian Life and Health Insurance Association. He points to a voluntary industry moratorium that prohibits insurers from asking applicants or existing policyholders to undergo genetic testing.

If you decide to be tested for a genetic condition, though, says Zinatelli, then you must disclose this information — and your results — on any application for insurance. “We need that equality of information, just like we need to know whether you’re a smoker, so that we can make appropriate decisions.”

Insurance broker and consultant David Wm. Brown, a partner at Toronto-based Al G. Brown & Associates, agrees. “We would always advise a client to disclose both whether they’ve had genetic testing, and the results of those tests,” he says. “Not sharing that information risks invalidating the application or the policy.”

For these reasons, Brown advises clients considering genetic testing to apply for and buy insurance before getting tested. An insurer can’t raise premiums or revoke a policy once it’s in place, he points out, so if you test positive you’ll still be covered. On the other hand, if the test shows that you don’t carry a potentially harmful mutation, the insurer may reduce the cost of your premium, but only if you’ve been rated for family history. “There are a myriad of reasons why you should buy life insurance earlier,” says Brown, “and this is one of them.”

If you’re worried about whether genetic testing will affect your ability to buy insurance, Brown suggests asking your insurance consultant for an anonymous, pre-underwriting decision from a variety of insurance companies so that you can get a sense of the possible outcomes before applying.

Testing positive for a genetic mutation may actually have benefits, says Zinatelli: it can lead to lifestyle changes or treatments, like Jolie Pitt’s prophylactic surgeries, that can actually reduce risk — and, therefore, premiums. Because every insurance policy is individually underwritten, says Graziani, insurers can and do take individual decisions and behaviours into account when determining premiums. So it’s important to keep your insurer up to date on any steps you’ve taken to reduce your risk.

For Canadians interested in contributing to the medical research that could one day eradicate genetically driven illnesses, Zinatelli has encouraging words: if you participate in genetic testing for research purposes but elect not to receive the results of your tests, insurers cannot request those results. “Canadian insurers are not interested in holding back research that can benefit society.”

Susan Goldberg is a business writer based in Thunder Bay, Ontario.

Susan Goldberg

Susan is an award-winning freelance writer and editor based in Thunder Bay, Ont. She has been writing about personal finance for more than 20 years.