Genetic testing, life insurance, and adverse selection

Abstract

Life insurance is a key element of the UK social structure in terms of family protection and house purchase; it thus needs to be viewed in this broad context, rather that solely as a commercial activity. Insurers have not so far actively requested genetic tests for life insurance, but have insisted on knowing of and being able to act on existing genetic test information. The main reason given for this has been to avoid servious adverse selection; however, this has never been adequately estimated. Review of the different major categories of Medelian genetic disorders suggests that the scope for adverse selection is extremely limited and that insurers would lose little, and possibly gain more, by foregoing the disclosure and use of this information in relation to life insurance policies of ‘normal’ size and nature. The likely future use in service of genetic tests based on susceptibility or population screening makes it especially important that the issue is rapidly resolved for Menelian disorders; so far there is no sign that insurers are willing to achieve this.