Does Genetic Testing Affect Life Insurance?

Clifford PendellWritten by Clifford Pendell
Louis LopesReviewed by Louis Lopes, CLU ChFC
lab worker completing a genetic test

In early 2013, Angelina Jolie had undergone the same test before having a proactive double mastectomy to reduce her likelihood of breast cancer, after which she published a call to action in the New York Times encouraging women to consider genetic testing.

The British Medical Journal found that in the 15 working days following Jolie’s May 2013 article, daily rates of testing for the cancer-causing mutations in BRCA1 and BRCA2 genes rose by 64% compared to the 15 working days prior. After six months, average monthly testing rates remained 37% higher than in the four months before the article’s publication.

In September 2023, Yahoo! Finance announced that the genetic testing market is expected to be worth more than 39.2 billion dollars by 2032. While genetic testing can help individuals identify potential health issues early-on, there is some concern that this information could be used for other purposes as well.

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What Exactly Is Genetic Testing?

Mayo Clinic explains genetic testing to involve “examining your DNA, the chemical database that carries instructions for your body's functions.” This type of testing “can reveal changes or alterations in your genes that may cause illness or disease,” and “provide important information for diagnosing, treating, and preventing illness.”

There are many different types of genetic testing, from diagnostic and predictive testing to prenatal testing, newborn screening, and preimplantation testing. With cancer being the most prevalent and challenging disease in today’s society, many people are seeking genetic testing specifically for cancer. According to Cancer.net, the American Society of Clinical Oncology (ASCO) recommends considering genetic testing for cancer if:

  • You have a personal or family history that suggests a genetic cause of cancer
  • The test can clearly show a specific genetic change
  • Results can help with diagnosis or management of the genetic condition or cancer(s).

Genetic Testing And Life Insurance: “Do We Know Each Other?”

Genetic testing and life insurance meet at the realization of mortality and subsequently go in dramatically different directions. For most of us, the idea of knowing how we might die is probably pretty unsettling. While genetic testing, like most forms of medicine, revolves around avoiding death, life insurance is focused on planning for death. Again, this whole conversation is uncomfortable, we know. But it’s a part of taking care of your family.

The key question and controversy surrounding genetic testing is whether life insurance companies can use the information to your disadvantage. It makes perfect sense: if they know you have a gene that raises your risk of cancer, they will either up your rates accordingly to mitigate their risk or deny you from receiving coverage altogether. Remember, to insurance companies, protecting you is still a business at the end of the day. They don’t hand out free money, and they don’t assume high levels of risk without creating a buffer for themselves.

The Story That Started The Debate

A February 2016 article published by Fast Company told the story of a woman in her mid-30s—typically a favorable age for buying life insurance—with no medical conditions, who was denied coverage specifically because of her positive BRCA 1 mutation (associated with breast and ovarian cancer).

While the woman was able to take steps to lessen her risk of cancer, she was unable to secure life insurance to protect her family—a Catch 22.

“I’m glad I’m being more proactive to reduce my cancer risk. But I also want my family to have some security if the worst happened,” she said.

The loophole for the insurance company was that the Genetic Information Nondiscrimination Act, passed in 2008 to prohibit health insurers from denying coverage based on gene mutations, does not apply to life insurance, disability insurance, or long-term care insurance. Life insurance agents will not be surprised to hear this. After all, the stark reality is that life insurance is the only industry in America that not only allows, but revolves around, genetic discrimination.

Will Life Insurance Companies Ask About Genetic Testing?

So, we’ve established that it’s possible and passable for life insurers to take genetic testing into account when determining rates and approvals. But what if you don’t offer that information? Can they ask? The NPR published an article in 2018 titled, 'Genetic Tests Can Hurt Your Chances of Getting Some Types of Insurance.' Here’s an excerpt that effectively answers this question:

"In general, long-term-care insurers can indeed use genetic test results when they decide whether to offer you coverage. The federal Genetic Information Nondiscrimation Act does prohibit insurers from asking for or using your genetic information to make decisions about whether to sell you health insurance or how much they charge you. But those pivacy protections don't apply to long-term care policies, life insurance, or disability insurance."

"If the insurer asks whether you've undergone genetic testing, you generally must disclose it, even if the testing was performed through a direct-to-consumer site like 23andMe, says Catherine Theroux, a spokeswoman for LIMRA, an insurance industry trade group."

Given Catherine Theroux's insight, we would not be surprised to see active lawmaking on this topic in the foreseeable future.

Will Life Insurance Companies Require Genetic Testing?

This is the question that really raises the stakes. The wild card with genetic testing has been the dramatic reduction in the cost of the procedures. Fast Company writes:

“When GINA first passed in 2008, genetic tests were expensive and not all that common. In 2011, the late Apple CEO Steve Jobs spent $100,000 to discover the genetic basis of the cancer that killed him. Today, a company called Illumina can sequence a person's whole genome for $1,000.”

They add:

“The BRCA test is now available for as little as $250, enabling many patients to pay for it out of pocket. Dozens of lab-testing companies have developed a BRCA test, including Color Genomics and Counsyl. The test even has a celebrity spokesperson in the form of Angelina Jolie…”

While lower costs for the technology behind genetic testing might benefit consumers wishing to uncover their dangers, we’d be foolish to think that insurance companies don’t have their eyes on scalability and viability in terms of potentially making genetic testing an application requirement at some point down the line.
According to The New York Times, the American Academy of Actuaries said in a statement that barring long-term care and life insurers from obtaining applicants’ test results “could lead to adverse selection and impact the stability of rates.” Since there is no current legislation against genetic discrimination by life insurers, they have even more leverage to make the first move.

A Parting Piece of Advice

All of the information above is to say that genetic testing can conceivably affect your ability to qualify for and afford life insurance. If you’re considering genetic testing and do not currently own a life insurance policy, we recommend securing life insurance before undergoing testing.

Young adults, in particular, often don’t realize the need for life insurance until they are much older. It might not be a pervasive thought at this point in your life, but you don’t want to hurt your ability to protect your family after you die.

If you truly want to invest in genetic testing, we’re not here to tell you that you shouldn’t. However, if it’s something you’re doing just because you read about it or because you’re curious, understand that you could put that money to better use—perhaps with life insurance.

With the cost of genetic testing still in the thousands of dollars, you could secure a term life policy, and the sum of your premiums would likely take years to approach the thousands. Why not protect your future instead of trying to predict it?

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Written by:

Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

Expert reviewed by:

Louis Lopes

Louis Lopes, CLU ChFC

Chartered Life Underwriter, Licensed Life and Health Agent

Louis has been in the insurance business for over 30 years. He specializes in “high risk” cases as well as more complex coverages for long term care, disability, and estate planning.

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