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Is genetic information relevantly different from other kinds of non-genetic information in the life insurance context?
  1. P J Malpas
  1. Ms P J Malpas, Department of Psychological Medicine, University of Auckland, Private Bag 92019, Auckland, NZ; p.malpas{at}auckland.ac.nz

Abstract

Within the medical, legal and bioethical literature, there has been an increasing concern that the information derived from genetic tests may be used to unfairly discriminate against individuals seeking various kinds of insurance; particularly health and life insurance. Consumer groups, the general public and those with genetic conditions have also expressed these concerns, specifically in the context of life insurance.

While it is true that all insurance companies may have an interest in the information obtained from genetic tests, life insurers potentially have a very strong incentive to (want to) use genetic information to rate applicants, as individuals generally purchase their own cover and may want to take out very large policies.

This paper critically focuses on genetic information in the context of life insurance. We consider whether genetic information differs in any relevant way from other kinds of non-genetic information required by and disclosed to life insurance companies by potential clients. We will argue that genetic information should not be treated any differently from other types of health information already collected from those wishing to purchase life insurance cover.

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Within the medical, legal and bioethical literature, there has been an increasing concern that the information derived from genetic tests may be used to unfairly discriminate against individuals seeking various kinds of insurance; particularly health and life insurance. Consumer groups, the general public and those with genetic conditions have also expressed these concerns, specifically in the context of life insurance.

While it is true that all insurance companies may have an interest in the information obtained from genetic tests, life insurers potentially have a very strong incentive to (want to) use genetic information to rate applicants as individuals generally purchase their own cover and may want to take out very large policies.

We begin by discussing the purpose of insurance, and then critically discuss the ethical question: “Does genetic information differ relevantly from other kinds of non-genetic medical information?”

THE PURPOSE OF INSURANCE

Insurance is grounded in two related and complementary principles: those of solidarity and equity.1 Solidarity involves the sharing by everyone of both benefits and costs, whilst equity implies that the amount individuals contribute ought to be roughly in accordance with their recognised level of risk.2 Individuals purchase insurance as a precaution against costly unpredictable events.

The purpose of insurance generally is to spread the costs of very expensive but unpredictable events across a similar group of insured individuals. Insurers are in the business of risk assessment and discrimination. Individuals seeking insurance are categorised into groups on the basis of certain factors, some of which they have no control over, and insurance companies set their premiums depending on the statistical likelihood that groups will go onto to make claims on their insurance polices.3 The measures insurers put in place to differentiate between people underlie the underwriting process.

All insurers, regardless of the type of insurance being offered, generally require detailed information from applicants in order to assess their risk (and hence their attractiveness or suitability to insure).

Life insurance differs from many other types of insurance available because one’s health status is central to whether insurance is offered, and under what conditions. That is, the past and present health of the individual as well as any genetic information including family history is applicable to the underwriting process. Furthermore, individuals who take out life insurance to manage the financial risk of their death have an incentive to purchase large amounts of cover. This is especially true if they have financial dependents and believe they may be at risk of dying prematurely.

LIFE INSURANCE AND GENETIC TEST RESULTS

The primary purpose of life insurance is twofold: to allow individuals, with financial dependents, to manage the financial risk of their death, and to assist with savings and investments. Advances in understanding genetic information purportedly seem to offer life insurers a much more accurate way of determining the risk of an individual’s premature death.

Belgium, Denmark and France have legislated to prohibit insurance companies from using the results from genetic tests; other countries such as Finland and Germany have adopted voluntary moratoria on the use of genetic test results.4

In the United Kingdom, an individual does not have to disclose genetic test results if he is requesting life insurance up to £500 000. However if he seeks to obtain a policy in excess of £500 000, he will need to disclose any genetic test results (Nys 2002, p135).5

In Australia and New Zealand life insurance companies cannot require that applicants take a genetic test as a condition of being offered cover, but if such tests have already been undertaken, the results must be made available to the company if they are requested (duty of disclosure). Insurers may request the results of a genetic test if they consider such information relevant to the decision to provide life insurance and if so, what the premium rate will be.

Individuals who know specific medical information, who know they are at-risk of inheriting a genetic disease, or who have been tested, must disclose this information when applying for cover. This is because the relationship between the life insurance company and an applicant is based on trust and fidelity. Both parties have to be confident that each will honour its commitment to honesty. Central to such commitment is that relevant information is available to each party.

When an individual knows relevant information about their health status and does not disclose it to the life insurance company, they may be offered a policy suited to someone with a lower risk. This situation is termed “adverse” or “anti-selection”, and insurance companies are at pains to minimise the incidence of it. Insurers are potentially disadvantaged because they face higher risks of a large payout and policy holders risk paying considerably higher premiums.

It is of particular concern where an individual takes out very large cover, as was experienced by insurance companies in the United States in relation to HIVi infection in the 1980s.2 The consequences may be costly if adverse selection is widespread: all policy holders face increased premiums, low risk holders may leave for competing companies and insurers may have to pay out for expensive claims.5 According to some commentators if insurance premiums become so elevated that not even those at high risk take out insurance cover, the market will eventually collapse.68

DOES GENETIC INFORMATION DIFFER RELEVANTLY FROM OTHER KINDS OF NON-GENETIC MEDICAL INFORMATION?

It is in the interests of all insurance companies to attract individuals of low risk and discourage those who present a higher risk. Obviously life insurance companies would prefer to sell their policies to individuals who are unlikely to become ill and die prematurely. Managing risk then will entail knowing information about individuals: what activities they participate in, family histories of disease, lifestyle choices, the influence of environmental factors, employment status and other factors that may impact on an individual’s life expectancy.

Various kinds of non-genetic testing techniques reveal highly accurate and predictive genetic information about an individual and her family. For instance, ultrasonography can accurately determine that an individual (at risk for polycystic kidney disease), who has cysts on the kidney, liver and spleen, almost certainly has polycystic kidney disease. Other non-genetic forms of clinical testing, for instance, blood pressure measurement, studying familial patterns of disease (family pedigrees), chloride tests on perspiration to test for cystic fibrosis and cholesterol tests can also be highly predictive of genetically based disease. For that reason, genetic knowledge ought to be dealt with in the same way as other personal information and treated accordingly. Individuals who know they have a family history of a specific disease must declare that information to an insurance company. It is unlikely that individuals who do not know about a family risk will undergo genetic testing, although it is possible that an individual may find out genetic information through population screening programmes.ii If you know, or suspect you are at risk, then you must disclose this information.

It is puzzling that genetic information faces restrictions such as those enforced by legislation (or voluntarily imposed limits) when other types of non-genetic medical and health information can be and is used in the underwriting process to determine who is offered life insurance and on what terms. “Genetic information is not special. It is not inherently more specific, predictive, sensitive, or private than other kinds of health information”.9

DISCRIMINATION

Insurers already discriminate against individuals on the basis of their perceived risk; individuals who smoke pay higher premiums than their non-smoking counterparts because the risks to one’s health and life expectancy from smoking are costly and known. Individuals who participate in hazardous occupations or risky pursuits such as base jumping, parachuting, hang-gliding, motor racing and aviation (other than as a passenger) may face paying higher premiums in securing life cover. Discrimination of this kind is generally tolerated—although not always welcomed by those who pay higher premiums—because it is recognised that some individuals voluntarily partake in risky lifestyle choices that statistically place them in a higher risk category.

Individuals who knowingly participate in risky pursuits ought to personally carry the financial consequences of such risks. And in fact they already do. If you are a smoker, your premiums for life insurance will be significantly higher than a non-smoker. For instance, in New Zealand, a 39-year-old woman smoker applying for cover will pay almost double the monthly premiums of a 39-year-old non-smoker.iii Central to this point is that individuals who participate in risky or hazardous pursuits actively do something that contributes to them being “high risk”. They are responsible for the risks they bear and therefore discrimination on the basis of their perceived risk is neither unfair nor invidious. “After all, why should someone who smokes heavily and overeats in the face of repeated health warnings, and who will probably have contributed by his actions to heart and lung disease if he develops either, be treated the same as someone who, for health reasons, has given up cigarettes and kept their weight down?”5

Well what then of the individual who does not voluntarily participate in risky choices yet is categorised as high risk through no fault or choice of his own? The person who is genetically tested and knows he carries the mutation for Huntington’s chorea has not done anything to contribute to his risk. He has not consented to the risk and probably, if given the choice, would prefer not to carry it. One could claim that the person who has to pay much higher premiums or who is refused insurance cover “because of a genetically based risk, is penalised for a condition he cannot help”.5

In fact we do discriminate against individuals for circumstances that are beyond their control, and it is not clear that we are always unjustified in doing so. Men are disadvantaged when seeking life insurance cover because their life expectancy is shorter than women, thus they pay higher premiums than women do. Men cannot help living shorter lives, just as women ought not to be praised for having longer life expectancies.

Moreover, as noted earlier, life insurance companies already discriminate on the basis of disclosed family medical histories without having recourse to genetic test results when it is clear that such histories often have a strong genetic heritage. As well as routine information such as age, sex, weight and height, individuals are queried about their general health status. This includes specific questions about familial diseases, mental health problems, assistance from a health professional for—among others things—asthma, liver disease, epilepsy, haemorrhoids, gout, cancer, varicose veins, diabetes and kidney disease. Applicants need to state any deformity, previous history of high blood pressure, and any abnormality of sight, hearing or speech. Many companies also ask specific questions about one’s HIV status. Clearly such information is taken into consideration when an individual applies for life insurance.

If you are HIV-positive—say as the result of a contaminated blood transfusion—you still face paying a higher premium than someone who is not HIV-positive. The fact that it is not your fault that you were infected with the HIV virus is irrelevant to the insurance company however sympathetic they may be. What is relevant here is the risk such an individual presents to the company and not the reason why they are at risk.

All such information disclosed to an insurance company provides them with a way of assessing risk and calculating whether an applicant will be offered cover and what the terms of the cover will be. It is clear though that generally one is not responsible or “to blame” for many of the disease categories that are considered important in assessing risk.

Our intuitions seem to pull both ways here, on the one hand we consider it unfair that individuals who may be at risk of premature death are penalised for genetic factors that are beyond their control, on the other, it is surely unfair to low-risk policy holders that life insurance companies should ignore probable risk by allowing an individual cover at the same premium as someone not at risk.

FAIRNESS

We should not lose sight of our intuition that individuals should not be unfairly penalised for factors beyond their control. Individuals who are at high risk of developing a disease that will almost certainly result in their premature death (or disability) should be assisted in securing financial security for their families because a decent, moral society supports and enables those who are disadvantaged by circumstances beyond their control. This is mirrored in the concept of solidarity.

Many of the adult onset (single, highly penetrant) diseases that can be accurately tested for do confer a heightened level of risk. If you test positive for these diseases, you know that you will develop the disease in the future unless you die of something else before hand.

One plausible suggestion is that life insurance companies could offer a limited amount of cover to those individuals who are known to carry genetic mutations for single, highly penetrant diseases (as is currently offered in the United Kingdom). As diseases caused by these particular mutations account for approximately 3% of all disease,10 a figure which is expected to decrease over time as many parents choose to avoid the birth of children with such disorders,iv a proposal such as this is not unreasonably prohibitive. This suggestion is given further credence by the two related and complementary principles that underlie life insurance: those of solidarity and equity. That is, although individuals ought to contribute an amount roughly in accordance with their recognised level of risk, sharing the benefits and burdens of genetic inheritance means recognising that some of us were dealt an unfortunate hand in the genetic lottery. Enabling individuals, who are disadvantaged due to their genetic inheritance, to secure financial security for their dependents, is the morally appropriate thing to do when the costs to us (as fellow policy holders) are minimal.

It is recognised that the majority of genetic diseases are multifactorial in origin, that is, they are thought to be due to a number of genes either acting in unison or in combination with environmental factors.10 Genetic testing is not equivalent to crystal ball gazing—in most cases, it is no more sensitive and predictive in nature than many other kinds of non-genetic information. Furthermore, genetic risk factors are not clearly validated—we know that both environmental and social factors influence ones risk of developing a disease or dying prematurely. For instance, we know that adult onset diabetes has a strong genetic link; however the disease is not common in people who are within the normal weight range.

The claim that life insurers may mistake the significance of genetic information and place too much emphasis on it (in terms of risk) can also be levelled against other types of non-genetic information.9 For instance, even if insurers had no more information than one’s age, sex, postal code and occupation, valid inferences could be made about predicted life expectancy and health outcomes. It is important to note that life insurance is offered to around 90–95% of applicants at standard or preferred rates in the UK, NZ and Canada11 and “despite the introduction of innumerable screening, diagnostic and therapeutic technologies over the past century, the percentage of people who have been able to obtain life insurance has in fact risen”.12

CONCLUSION

Recent advances in molecular genetics offer us tremendous possibilities for being able to treat and alleviate the symptoms of common familial diseases. Along with the benefits predicted, are concerns that life insurance companies may use genetic information to unfairly discriminate against individuals. Does the information resulting from genetic tests provide insurance underwriters with a uniquely accurate way of predicting the risk of premature death from genetic diseases? This discussion has argued that in most cases it does not and will not, and furthermore, that genetic information does not differ relevantly from other kinds of non-genetic information required by life insurance companies.

The interplay amongst genes and in conjunction with environmental factors in terms of shaping health and life expectancy outcomes weaves a complicated and intricate tapestry: a tapestry that a genetic test cannot accurately predict in isolation from other non-genetic factors.

Acknowledgments

I would like to thank R Hursthouse for her insightful and constructive comments. I would also like to thank the two anonymous reviewers from the JME for their helpful commentary.

REFERENCES

Footnotes

  • i It is important to note that AIDS is an infectious disease. Individuals cannot be tested for their risk of developing AIDS.

  • ii My thanks to an anonymous reviewer from the Journal of Medical Ethics for making this point.

  • iii This was accurate for Sovereign, Asteron, Axa and AIA.

  • iv Through PGD and IVF, selective abortion and the decision of informed at-risk parents not to have children of their own.

  • Funding: This paper was generously supported by the Auckland Medical Research Foundation Scholarship.

  • Competing interests: None.

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