Genetic testing

Interest in genetic testing is increasing as more people look to predict whether they are predisposed to inherit a serious disease from a parent or grandparent. Each year thousands of people in the UK take these tests, which can detect if you carry the genes associated with cancer, cystic fibrosis or Alzheimer’s disease.

Taking a genetic test can have positive medical benefits. Depending on the results, you could, for example, change your lifestyle to minimise your chances of contracting a particular disease. But if you later decide to take out some form of insurance such as life cover, taking a genetic test could make it more difficult to secure cover. Insurers are concerned about adverse selection – people who know they are at high risk taking out policies while concealing their true condition.

“Genetic testing is quite a complex issue. There is this drive on the part of insurers to find out as much about you as they can,” says Michael James, marketing manager at Standard Life. “An argument can be made that as genetic tests become more available, you could have someone going and taking a bunch of them, finding out they are predisposed to a particular condition and taking out a life insurance policy.”

Under an agreement reached last year with the Department of Health, insurers are forbidden from factoring in the results of genetic tests when deciding whether to accept an application for life and protection cover unless the test was conducted for Huntington’s disease, a rare brain disorder. This moratorium will last until 2011. However, the ban is subject to review in 2008 by the Department of Health’s Genetics and Insurance Committee (GAIC), which will determine whether it remains in place and for how long.

Jon French, a spokesman for the Association of British Insurers, says: “Insurance companies can’t use the results of predictive genetic testing in determining applications for life and protection insurance subject to one exception which is for Huntington’s disease and it only applies to very high-value policies.”

Prudential, the UK’s second largest life assurer, dealt with just 8 to 10 applications involving genetic test data last year, while Norwich Union, the biggest company, received about 88 genetic test results.

What is Huntington’s disease and why are insurers allowed to consider it when writing policies?

It is an inherited fatal condition, governed by a single genetic defect, that destroys the brain. A positive test predicts with total certainty that the disease will develop. Only an estimated 6,500 people in the UK have Huntington’s disease.

According to the GAIC, people with a family history of Huntington’s disease previously faced difficulty in obtaining life and protection insurance as those with a parent suffering from it have a 50 per cent chance of carrying the abnormal gene. A negative test result allows those with a family history of Huntington’s to avoid paying higher insurance premiums, argued insurers in 2000 when they brought their application to the GAIC to allow tests for the disease to be considered. The committee approved their petition that year.

“The evidence presented demonstrates that the two tests for the Huntington’s gene are reliable and that an abnormal result is associated with significant clinical effects and with an increased probability of a claim on a life insurance policy,” John Durant, chairman of the GAIC, said at the time.

“This decision will mean that those with a negative test result will not be asked to pay more for life insurance because of their family history of Huntington’s disease.”

What are the precise details on the policies excluded from the moratorium on genetic testing?

Insurers can consider a genetic test for Huntington’s only if they are writing a policy paying out more than £500,000 for life insurance. Similarly, they can consider it if they are paying out more than £300,000 in critical illness insurance and income protection policies (such as permanent health insurance), paying annual benefits of more than £30,000.

The ABI says 97 per cent of policies taken out in 2004 fell below these limits. The rules apply to policies in aggregate, so if you have a collection of policies with different insurers, an insurer will tally up the limits on your contracts to determine whether these tests will be considered.

How frequently are genetic tests reviewed?

The GAIC reviews the standards for genetic testing every three years. The next review will take place in 2008.

What should you do if you carry the gene for Huntington’s disease and you would like to take up an insurance policy?

Although insurers will ignore genetic tests up to the financial limits agreed with the GAIC, your insurer is still likely to ask probing questions about your health which may reveal a history of Huntington’s disease in your family. Your options therefore are likely to be severely restricted. If you are able to secure coverage, you will face much higher premiums or receive a restricted level of cover. A good point of contact for advice is the Huntington’s Disease Association (020 7022 1950; www.hda.org.uk). If you have not been diagnosed yet with the disease, it may be easier to gain coverage.

A rule of thumb is to buy life insurance and protection policies for children predisposed to inheriting a genetic condition early and lock coverage in for long periods.