Time to End the Use of Genetic Test Results in Life Insurance Underwriting
12 Pages Posted: 30 Mar 2018 Last revised: 26 Jul 2018
Date Written: August 1, 2018
The decreasing cost of genome and exome sequencing, including direct-to-consumer testing, produces information asymmetry between applicants and life insurance companies, which increases the risk of adverse selection. Rather than requiring applicants for life insurance to undergo genetic testing, life insurers ought to revise their policies and not use the results of genetic tests in the medical records of applicants for underwriting. Prohibitions on access to genetic test results already have been adopted without great upheaval in several other countries. There are two main reasons why this new approach should be used in the United States. First, genetic test results do not provide essential information that is not already available through traditional underwriting measures. Second, because many individuals at genetically increased risk of serious disorders currently decline testing out of fear of the economic consequences, policies prohibiting the use of genetic test results in life insurance will encourage genetic testing and facilitate timely surveillance and necessary medical intervention, thereby saving lives.
Keywords: Adverse Selection, Genetic Discrimination, Genetic Testing, Life Insurance, Medical Underwriting
JEL Classification: K31, K32
Suggested Citation: Suggested Citation