More and more people are researching their ancestry via do-it-yourself genetic testing kits at home these days. Getting the results may be exciting, but they may have unexpected emotional and financial consequences, such as increasing your term life insurance rates.
Surprising results of genetic tests
If a genetic test can reveal your risk of developing a chronic illness or help you to trace your family tree, taking one might seem like a smart choice.
However, cautionary tales abound with warnings about the unanticipated emotional fall-out, such as the shock of finding out that your beloved dad is not your biological father. How do you deal with that discovery when your mom had no intention of revealing that family secret?
In addition, there are also potential financial repercussions of genetic testing, such as the impact on your term life insurance rates or your ability to be insured.
More and more life insurance companies are asking to review the results of genetic tests as part of their life insurance underwriting procedures.
If you don’t have a life insurance policy, get one in place before you undergo genetic testing, if possible.
If you’ve already mailed back your saliva with your test kit and are awaiting your results, work with a life insurance broker like Quotacy who can offer you competitive term life insurance rates from multiple companies to ensure that your life insurance quotes don’t skyrocket.
» Compare: Term life insurance quotes
Affordable term life insurance rates don’t always run along genetic lines
Let’s say your genetic test reveals that you are related to the Queen of England. Now you can legitimately don fancy hats and gloves, if you wish.
You also may find out that you have the potential for inheriting hemophilia, a genetic blood clotting disorder that runs through the British royal family’s bloodline.
The genetic testing you did out of curiosity about your royal ancestors could negatively impact your term life insurance rates.
Life insurance companies don’t care about your social class so much, but your risk class is another matter. Going royal may make you pay more for your life insurance overall as all of that aristocratic inbreeding has created some wonky bloodlines.
If you get genetically tested, talk with your medical doctor prior to your tests to ensure that you will receive genetic counseling to help you understand your results fully in an emotionally supportive environment.
Many years ago, I underwent voluntary genetic testing to assist scientific medical research conducted at the University of Minnesota on hereditary cancers—these are types of cancer that are passed down across generations within families.
Why did I agree to do the tests when I knew that it could significantly impact my future ability to get health insurance, life insurance, or disability insurance? I consented to the tests to help advance scientific research on familial melanoma.
Prior to the testing, I received genetic counseling and understood clearly the impact it could have on my life.
I was fortunate to find out that the type of melanoma cancer that my mother died from at age 50 is not the type that is inherited or passed on. That was a big relief.
However, the results could have been different and I would have had to relay that difficult news to my family.
Having the support of the genetic counseling staff at the University of Minnesota aided me in doing the right thing for scientific research with less emotional stress.
If I could wave my magic wand, I would pass governmental legislation that protects people who undergo genetic testing from being potentially uninsurable or having to pay higher term life insurance rates.
There are good reasons to get genetic tests and counseling before you conceive, for example, if you or your life partner have challenging hereditary diseases in your family tree. Protecting the health of an unborn child should not make you or your children uninsurable or make your insurance unaffordable.
I don’t have that type of political power, but I do encourage you to talk to your elected public officials if this is an issues that concerns you.
What I do have the power to do is educate you about how life insurance company underwriters determine your rates for life insurance so that you can make informed decisions about getting a genetic test done (or not) from a financial perspective.
How underwriters calculate your term life insurance rates
When you apply for term life insurance coverage, you will be asked a series of medical questions and you will normally have to undergo a brief medical exam. Once your results are in, the insurance company’s actuaries calculate your risk of mortality based on a number of factors including:
- Family medical history
- Personal medical history
- Driving record
- Smoking status
- Substance abuse history
Once that’s done, your insurance company’s underwriters will determine how high (or low) your term life insurance rates will be based on your risk assessment.
With that in mind, it isn’t surprising that underwriters want to know as much as they can about you to limit their company’s financial risk. And, if you’ve taken a genetics test, you’ve in essence created a new reservoir of information for underwriters to evaluate.
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Four facts about term life insurance and genetic testing
Number 1: The Genetic Information Nondiscrimination Act (2008) doesn’t apply to life insurance.
Passed in 2008, the law was designed to prevent health insurance providers and employers from using genetic information as a basis to deny insurance or employment.
However, those protections do not extend to you if you are applying for life insurance, disability insurance, or long-term care. This means that a life insurance company can deny you term life insurance or raise your term life insurance rates considerably based on a genetic test that they discover during their underwriting process.
Number 2: You must tell your life insurance company if you’ve had a genetic test.
Don’t knowingly hide the fact that you have done genetic testing, if asked, during your life insurance application process, including your phone interview or medical exam.
If it is discovered after your death that you lied during the application process, then your life insurance company may use your fraud to deny paying your life insurance policy death benefit to your family or business (your beneficiaries).
This would be a horrible news for your family to deal with, in addition to your loss.
Number 3: If you have a policy, your term life insurance rates cannot be increased based on new genetic information.
Your insurance company cannot raise your term life insurance rates if you decide to do genetic testing once you already have a policy.
This is just one reason why it is wise to wait to do any genetic testing (unless recommended by your doctor) until after you’ve completed your life insurance application and have an in-force policy.
Number 4: Some state laws prohibit genetic discrimination.
Some states have passed laws designed to prevent life insurance companies from using genetic information to determine term life insurance rates. Those laws only apply to insurance companies in those states, not across the country.
If you live in one of these states and your insurer is located in another without a similar law, they may use genetic information to calculate your rates—even if you have not developed a disease or are not showing symptoms.
Here are a few quoted examples of state laws from genome.gov:
Insurers may not refuse to issue or deliver any policy of life insurance or disability insurance that affords certain services and benefits or impose a higher premium rate or charge for those policies solely because the person to be insured has the sickle-cell trait.
An insurer, agent or broker authorized to issue life insurance policies, policies against disability from injury or disease or policies for long-term care may not practice unfair discrimination because of the results of a genetic test or the provision of genetic information or require an applicant to undergo a genetic test as a condition of issuance or renewal of a policy. Unfair discrimination involves discriminatory practices against persons unless such action is based on reliable information relating to the insured’s mortality or morbidity and based on sound actuarial principles or actual or reasonably anticipated claim experience. These insurers may ask if an applicant has taken a genetic test.
No insurance company may refuse to issue or deliver any policy of life insurance solely by reason of the fact that the person to be insured possesses sickle cell trait or hemoglobin C trait. A policy also may not carry a higher premium rate or charge by reason of the fact that the person to be insured possesses these traits.
Term life insurance rates and the need to know
In view of the risks involved, when should you undergo genetic testing?
Stick with your doctor’s counsel.
According to the Mayo Clinic, here some of the important genetic tests that you shouldn’t hesitate to take if recommended by your physician:
- Diagnostic testing: This type of test is used by doctors to determine your symptoms are related to genetically linked disease.
- Pharmacogenetics: These tests help doctors determine what type of medication and dosage will work best with your body.
- Prenatal testing: Allows your physician to detect abnormalities in your baby’s genes by testing the mother’s blood.
- Preimplantation testing: If you are trying to get pregnant through in vitro fertilization, this test screens the embryo/s before they are implanted.
- Carrier testing: To determine if you or your partner have a high likelihood of having a child with a specific genetic condition.
It probably isn’t wise to do a genetic test right before applying for term life coverage, unless it is medically necessary.
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Is genetic testing the future of life insurance underwriting?
If a DNA test can determine your future, you can see why this would make the life insurance companies pay attention?
The goal of an underwriter at a life insurance company is to determine the risk involved with insuring you.
Some life insurance companies still underwrite applications with actuarial statistics of when they think you will die based on your medical records, family history, and lifestyle.
The amount of time it can take to have an underwriter sift through medical records (not to mention waiting for doctors’ offices to send these records) can leave the client waiting weeks to hear back from the insurance company as to what their final term life insurance rate and risk class will be.
A DNA test would be a much faster and cheaper approach, if it was accurate.
Currently, if you take an ancestry and/or DNA test, there are certain companies that will destroy your information afterwards upon request.
When you sign up for these tests, there often is an opt-in to share your data with medical researchers. According to Consumer Watchdog, even with the option, roughly 80% of people who take these tests still choose to share their data.
Lower prices of life insurance via genetic testing
Genetic testing could be a big win for consumers and the life insurance companies. It could lower the price of life insurance for everyone by increasing the accuracy of underwriting.
And, it could decrease the time that going from quote to coverage takes.
Regardless of whether a genetic test is on the horizon for you or not, we can help you find the life insurance coverage that fits your needs. View your term life insurance rates now.