Consumers unwilling to share burden under DNA regime
About 61% of people are against subsidising life insurance premiums for insureds at higher risk of illness based on genetic testing, according to Financial Services Council (FSC) consumer research.
The FSC is using the research to design its moratorium on the use of genetic testing.
Under its proposal, all Australians can obtain up to $500,000 of life or total and permanent disability cover without having to disclose an adverse test result. There are also limits of $200,000 for trauma and $4000 a month for income protection.
The moratorium will take effect in July next year and continue for five years.
Most survey respondents are unwilling to pay any extra premiums to subsidise those who have had an adverse genetic test. A small minority would be willing to pay up to $5.
About 51% are in favour of setting premiums based on the likelihood of making a claim, and only 22% oppose individually set premiums.
About 63% of Australians would be prepared to take a genetic test.
The FSC warns the moratorium cannot be open-ended because the cost burden on other customers would be too great.
Senior Policy Manager Nick Kirwan says the science is advancing rapidly and no one knows the long-term cost.
But caps and regular reviews will ensure the long-term costs are manageable, he says.
The FSC will consult with geneticists, mental health advocates, consumer groups, the Australian Financial Complaints Authority and the industry’s Code Compliance Committee next week.