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Here in Australia it's not illegal for life insurance, but they've just brought in a morutorium before deciding if they're going to keep allowing it to be legal

Here in Australia it's not illegal for life insurance, but they've just brought in a morutorium before deciding if they're going to keep allowing it to be legal, so that could change.

wahern 7y ago
It's problematic for life insurance. You can socialize the costs of the self-selection problem in healthcare, but you can't do the same with life insurance. Maybe at the margins we can tweak things, provide publicly-funded alternatives (e.g. like Social Security survivorship benefits in the U.S.), etc but fundamentally if you prevent discrimination then private life insurance will simply disappear. When I bought my term life insurance policy they took a blood sample, as they have for decades. I don't know if they did any genetic screening, but if they didn't I presume it's just because the cost+benefit wasn't there yet. Considering that I could do whole genome sequencing today for a couple thousand dollars and game the system, that bodes well for the future as it suggests the viability of tiered screening and risk management strategies that smooth out the costs for most people in the face of increasing self-selection behaviors as genome sequencing costs decline for insurer and insured. BTW, regardless of whether a life insurer does genetic screening, if you procure a policy knowing of a substantial risk of genetic illness without disclosing it that would violate the terms of most policies and may even rise to the level of insurance fraud.[1] We may see laws limiting the types of affirmative screening that can be done by insurers, but I could never see a law limiting such contractual terms and general background rules as it would certainly destroy the market for life insurance. [1] Thus, if you want both life or disability insurance and genetic tests, the legally and ethically correct thing to do is buy the policy first and then do the genetic tests afterwards. It makes sense to buy life and disability insurance at a relatively young age, anyhow, like in your late twenties or early thirties where your income has [hopefully] already risen to a level where you can buy a multi-million dollar policy without a penalty--from a risk management perspective insurers can only offer the best rates when there's a correspondence between the policy amount and existing, proven income. By contrast, it makes less sense to do genetic testing until you have reason to, like in middle age. That's fortuitous and one reason why we should be less concerned about the effect of voluntary genetic testing and disclosure rules regarding life insurance. (Obviously affirmative genetic screening is a different problem.)

Here in Australia it's not illegal for life insurance, but they've just brought in a morutorium before deciding if they're going to keep allowing it to be legal, so that could change.

wahern 7y ago

It's problematic for life insurance. You can socialize the costs of the self-selection problem in healthcare, but you can't do the same with life insurance. Maybe at the margins we can tweak things, provide publicly-funded alternatives (e.g. like Social Security survivorship benefits in the U.S.), etc but fundamentally if you prevent discrimination then private life insurance will simply disappear. When I bought my term life insurance policy they took a blood sample, as they have for decades. I don't know if they did any genetic screening, but if they didn't I presume it's just because the cost+benefit wasn't there yet. Considering that I could do whole genome sequencing today for a couple thousand dollars and game the system, that bodes well for the future as it suggests the viability of tiered screening and risk management strategies that smooth out the costs for most people in the face of increasing self-selection behaviors as genome sequencing costs decline for insurer and insured. BTW, regardless of whether a life insurer does genetic screening, if you procure a policy knowing of a substantial risk of genetic illness without disclosing it that would violate the terms of most policies and may even rise to the level of insurance fraud.[1] We may see laws limiting the types of affirmative screening that can be done by insurers, but I could never see a law limiting such contractual terms and general background rules as it would certainly destroy the market for life insurance. [1] Thus, if you want both life or disability insurance and genetic tests, the legally and ethically correct thing to do is buy the policy first and then do the genetic tests afterwards. It makes sense to buy life and disability insurance at a relatively young age, anyhow, like in your late twenties or early thirties where your income has [hopefully] already risen to a level where you can buy a multi-million dollar policy without a penalty--from a risk management perspective insurers can only offer the best rates when there's a correspondence between the policy amount and existing, proven income. By contrast, it makes less sense to do genetic testing until you have reason to, like in middle age. That's fortuitous and one reason why we should be less concerned about the effect of voluntary genetic testing and disclosure rules regarding life insurance. (Obviously affirmative genetic screening is a different problem.)