Under a new government proposal, there will be a total ban on genetic tests to prevent life insurers from discriminating based on adverse predictive genetic test results. Predictive genetic tests identify gene variants associated with hereditary disorders that may manifest after birth, often later in life, but are not clinically detectable at the time of testing. To address concerns about discrimination by life insurers, the government has announced this comprehensive ban on predictive genetic testing.
Life insurance and genetic testing
Voluntary insurance, such as life insurance, is individually assessed and priced based on risk. The premiums are tailored to the specific risks associated with the individual applying for coverage. Many people are familiar with inquiries regarding family medical history, personal health, and lifestyle habits.
Since life insurance is a guaranteed renewable product, once a policy is underwritten and initiated, the insurer cannot alter or terminate a person’s coverage, as long as all future premiums are paid on time. However, premium rates may vary within a risk pool, such as adjustments based on age. This highlights the importance of thoroughly reviewing life insurance policies if health issues or conditions have developed since the original policy was established.
In 2019, Australia’s life insurance industry introduced a partial moratorium to disclose genetic test results. The moratorium, which is in place for life insurance applications received from 1 July 2019, prevents genetic results from being utilised for some types of insurance cover under certain thresholds. However, using APRA data, when compared to the average sum insured, the moratorium coverage thresholds are well below par:
| Policy cover | Moratorium limit | APRA average |
| Death | $500,000 | $713,959 |
| Total permanent disability | $500,000 | $849,128 |
| Trauma and/or critical illness | $200,000 | $207,414 |
| Disability income insurance | $4,000* a month | $7,706 a month |
Genetic test discrimination
Apart from the moratorium, there is proof that people are not undertaking genetic tests or participating in scientific research because of concerns about getting affordable life insurance. And, discrimination still exists.
The Government response
The Government has announced a complete ban on the use of genetic testing in life insurance underwriting. The ban will be liable to a 5-year review. However, the Government has not introduced law allowing the reforms nor has it announced the date that the ban will take effect. And, the total ban affects predictive genetic testing only – it does not cover clinical diagnostic genetic testing to confirm a suspected condition based on symptoms.
A global issue
In Australia, there are challenges in dealing with the increasing availability of genetic data. In the UK, insurance companies are not allowed to use predictive genetic test results unless the results are favourable or have been voluntarily or accidentally shared with the insurer. There is an exception for life insurance worth more than £500,000 when it comes to Huntington’s disease. In Canada, the Genetic Non-Discrimination Act prevents any entity, including insurers, from requesting or using genetic test results. However, individuals can voluntarily disclose a test result showing that they do not have a genetic change that runs in the family.
In the USA, genetic test results are being prevented by the Genetic Information Nondiscrimination Act in health insurance and employment contexts but not life insurance. The US state of Florida introduced a law preventing life insurers from using predictive genetic test results in underwriting.
More women using ‘downsizer’ contributions to boost super
If you are 55 years of age or older, the downsizer contribution rules allow you to contribute up to $300,000 from the proceeds of the sale of your home to your super fund. In 2023-24, over 57% of people making a ‘downsizer’ contribution to super were women. And, the average value of the contribution was higher at $262,000 versus $259,000 contributed by men. Most people aged between 65 and 69 make a downsizer contribution. From age 65, a downsizer contribution can be withdrawn from super if your situation changes, even if you are still working. People aged between 55 and 64 usually won’t have access to these funds until they are at least 60 and retired.
Downsizer contributions are not included in the existing upper age test, the total super balance rules and the work test. For couples, both members can use the concession for the same home. If you or your partner meet the other requirements, both of you can contribute up to $300,000. This is the case even if one of you didn’t have an ownership interest in the sold property. To qualify to make a downsizer contribution, you don’t need to buy another home once you have sold your existing property, and you don’t need to buy a smaller home – you could purchase a larger and more expensive home and make a downsizer contribution if you can access other funds.