Genes & Life Insurance – Brewing Controversy

Life insurance is a common tool used by New Yorkers to protect loved ones in the event of an uncertain future. At other times it is a useful way to transfer assets to a new generation, often with significant tax benefits. While there are different types of life insurances (term, universal, whole), the basic idea is the same. An individual enters into a contract with the insurance company to send monthly payments (premiums) in exchange for a lump payment to the insured’s beneficiaries in the event of death.

Naturally, the amount that you have to pay in a monthly premium to receive a certain size of lump sum depends on different factors. The life insurance underwriting process is complex, but it usually seeks to evaluate one’s general risk of dying in a certain period. Age is huge factor. It will cost far less for a 20 year to purchase the same value insurance as a 75 year old.

Factors That Can Be Considered
There is much controversy regarding what factors can and should be considered in the underwriting process. Most notably, should genetic information, perhaps regarding predisposition for certain health problems, be factored in? A study on that topic published last week in the Medical Journal of Australia has attracted much attention. The author found that there was systematic discrimination against certain “genetically vulnerable” individuals.

One major concern is that, as understanding about genetics advances, many individuals may find themselves boxed into unfair situations for apparent health “risks” that they have no control over.

In addition, if genetic information can be used in many different ways, then residents may be disincentivized from getting tested at all. This sort of “don’t ask, don’t tell” approach may provide short-term benefit. But it also may prevent people from receiving treatment or support to minimize their pre-disposed health risks.

Can this happen to New Yorkers?

Laws vary in the US between states regarding how various companies can use genetic information that they obtain. Notably, in New York it is unlawful for life insurance companies to discriminate against applicants based on genetic information. The same rules apply to use in disability insurance applications. However, state law currently does not prevent consideration of genetics when applying for long-term care insurance.

To learn more about how you can incorporate life insurance, long-term care insurance, or other protections into your future legal plans, visit an attorney today.

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