Genetic Screening, Privacy and Life Insurance

In a recent case a life insurer declined paying the dependents of a deceased policyholder their breadwinner’s life insurance money on the ground that he violated terms of the policy. The violation was in respect of hiding vital information relating to the policyholder’s heath condition.

In a different case a prospective customer claimed he was refused cover by life insurers on the basis of his health condition and age. When, eventually, his application for a life policy was accepted, the cost was exorbitant and seemed discriminatory. A move by the UK government to end discrimination by life insurance companies, at least as it affects age, is currently brewing a controversy.

The two cases highlighted above show that while every policyholder owes it as an obligation to make known to their insurer their existing health condition while taking out the policy, as well as changes that may occur afterwards, there is also a risk to it. These changes may not be restricted to one’s health but other circumstances that could significantly impact one’s lifestyle.

Personalised medicine and privacy
Technology is changing the way information relating to one’s health can be obtained. A new development is the possibility of easily obtaining individual DNA sequences. What it does mean is that genes that are highly likely to cause diseases in an individual could be identified and treated directly. But it also means that one could know their chances of suffering from different diseases. Armed with such information, which is very personal to one and private, the question arises of whether one is still obliged to divulge such information to an insurer.

The process of signing up to a life insurance policy involves disclosing health information relating to one, one’s parents and even members of one’s immediate family, in the case of a married person with children. Holding back any vital piece of information, it is usually made known, could result in the invalidation of the policy.

But with genetic screening going the extra-mile to discover the critical illness that could be suffered by a policyholder or prospective customer in years to come what right has an insurance firm to such information?

The Australian example
Already genetic screening in Australia has given rise to a serious debate regarding the amount of detail insurers need to know about a customer. It was revealed that a number of people whose genetic screening results show that they were likely to suffer serious diseases in future have had their life insurance applications declined.

According to the country’s Investment and Financial Services Association, half a million Australians applied for life insurance in 2007. While four hundred of the applicants disclosed a previous genetic test, 20 per cent had their applications rejected. But it was just two per cent that was directly affected by genetic test alone.

Fear of the unknown
Presently, genetic screening is not a requirement for a life insurance application in the UK. But as it spreads fast across the globe, one may not be so sure that in a few years to come genetic test won’t become an issue.

In the meantime, insurers will continue to insist on knowing the whole truth about a customer’s medical history, including other issues that could impact on their policy. One’s privacy, to this extent, is shared with the insurer and is used in dealing with issues relating to their policy for as long as it matters.

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