Are Insurance Companies Using Your Genetic Data?
Well, they probably are — but NOT in the way you think.
In the rapidly evolving landscape of health and aging, life insurance is a necessity to protect our way of life.
When you apply for a life insurance policy, your insurance company will typically ask you for information such as age, gender, job and any pre-existing health issues to assess your eligibility for the application.
But does taking a DNA test hurt your chances of getting insured? And could your genetic results be leaked to your insurer — resulting in higher premiums or even denial of coverage?
This fear is not unfounded, as many consumers are cautious about doing a DNA test because they are fearful that it may impact your policies.
However, the reality could not be further from the truth.
Because…
Genetic Test Results Can’t Be Used in Normal Insurance Underwriting
The Genetic Information Nondiscrimination Act (GINA) prohibits insurance companies from using genetic data to assess insurance applications. [1]
Globally, many countries have set up a Moratorium on Genetic Testing and Insurance to protect consumers from discrimination based on their genetic results.
In Singapore, Life Insurers like Prudential, AIA, Manulife, and many others are NOT ALLOWED to ask you for your genetic results for underwriting purposes.
Even if you already have a life insurance policy, your genetic test results will not affect your existing coverage. This means your insurance policy cannot be cancelled, even if you took a DNA test that shows you have a higher likelihood of developing a certain type of disease or cancer.
In fact, insurance underwriters can only rely on medical health screening reports when assessing your risk for life insurance policies, as a DNA test and a medical health screening test is fundamentally different.
However, there are exceptions to this.
You Have A High-Value Insurance Coverage
High-value clients can pose a risk to insurance companies. They want your money, but must also mitigate potential risk.
So how high is considered high?
It actually varies from country to country.
In Singapore, a life insurance plan exceeding $2 million or a critical illness plan surpassing $500,000 would be considered high.
However, in Australia, high coverage is defined as a plan exceeding $500,000 for death and total permanent disability.
When you attain such substantial coverage (and wealth), your insurer would have to ask whether you have undergone any genetic tests revealing your hereditary risks as part of the insurance application process. The 2 primary genetic risks they look for are :
- Huntington Disease (HTT gene)
- Breast Cancer (BRCA1 or BRCA2 gene)
While your other risks may or may not be considered, only DNA results from an approved medical genetic test prescribed by a doctor can be accepted by insurance underwriters. Direct-To-Consumer (DTC) tests like 23andMe, CircleDNA, Ori DNA, eBeauty DNA cannot be considered due to the fundamental regulatory differences between Consumer DNA tests and Medical DNA tests.
Consider this scenario :
Kelly intends to purchase a $1,000,000 sum assured for critical illness.
Because her coverage is considered high under Singapore’s standards (ie. more than $500,000 for critical illness). her insurer must ask if she has undergone any medical DNA tests previously.
If she admits to a clinical genetic test for breast cancer, Kelly must declare the result for her insurance application review.
Based on this information, her insurer will determine eligibility and the final cost for her $1,000,000 critical illness plan.
Sounds troublesome to buy a high-value insurance plan?
Yes it is — because a high-value life policy also means greater risk to the insurance company taking you up as a client.
Imagine the extra paperwork your poor insurance advisor have to do just to get your application approved.
Furthermore, there are cases where clients intentionally withheld genetic information when applying for an expensive policy and were later discovered, jeopardizing the validity of their policy and the careers of the insurance advisors serving them.
Not exactly an advantage, isn’t it?
So how do insurance companies take advantage of your genetic results then?
They Can Design More Precise Insurance Plans
Insurance advisors have to take a personalized approach when selling insurance. This process involves building trust and highlighting long-term value.
With client consent, genetic insights can enable your insurance advisor to have a more nuanced understanding of your health risks, allowing them to provide a higher level of personalized service, and align coverage more closely to your desired way of life.
But before you think “Oh no! My insurance agent who is also my friend/neighbor/relative/colleague-with-a-side-hustle is going to sell me more insurance plans!”, it may be wise to consider the advantages of buying insurance based on predictions of your DNA test… before shit really happens.
I call this the “Triple Advantage” — Cheaper, Earlier, Smarter.
Advantage 1 : Cheaper Premiums
Knowing you are at higher risk of a particular disease doesn’t necessary mean you will definitely get it. However, it would also be prudent to buy coverage at lower premiums early on to shield yourself from potential future rate increases.
For example, buying a $250K life policy in your 20’s will lock in a premium of $40/month VS a whooping $105/month when you buy at 45 years old [3], therefore resulting in massive cost savings over time.
Advantage 2 : Earlier Protection
Many health issues or tragedies can be sudden and unexpected. But once we know our inherent risks (eg. heart risk), we can “predict” our chances and create financial strategies earlier to protect ourselves and our loved ones before incidents happen.
This is particularly true as more young people are suffering from sudden cardiac arrest even though they are fit athletes, leaving behind grieving parents, spouses, and children. [4]
Advantage 3 : Smarter Planning
You have probably heard of this adage “Prevention is better than Cure”. However, I would argue that a better quote should be “Prevention + Protection is better than cure”.
While having the assurance of a handsome insurance payout is good — it’s better to be sick and rich, rather than sick and poor (from all the hospital bills) — I bet none of us want to be sick in the first place.
That is why a smarter way of life planning isn’t just about being protected financially, but also proactively using our genetic health insights to reduce our risk of disease through correct lifestyle and food choices.
Conclusion
Looking ahead, the future of life insurance may lie in the hands of consumers who embrace the potential of DNA testing.
In conclusion, the marriage of DNA testing and life insurance presents an opportunity for consumers to not only protect their financial future more effectively but also to do so at a lower cost.
By understanding and navigating the current underwriting landscape, smart consumers can embrace the future of insurance — one where genetic information becomes a tool for better, more affordable, and earlier protection.
As much as I hate to be sold to, I also realize how important it is to buy right. So give your insurance agent a chance, and maybe even yourself as well, to unlock the possibilities of a better financial tomorrow.
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Disclaimer: The content in this article is intended solely for informational purposes and may contain outdated information after the date of publishing that doesn’t reflect the latest scientific advancements. The content is presented “as is” and is not guaranteed to be complete or up-to-date.
