Money: Letting the gene out of the bottle

Genetic tests may not affect your insurance premiums - yet. Tom Tickell reports; Widespread genetic testing may mean higher premiums for some but better terms for everyone else

Your fate may not be in your hands but your genes, and some insurers want to know more. Last week, the Association of British Insurers set out guidelines on genetic testing that look bland now but may just be the start.

Under these guidelines, anyone applying for life insurance will be required to give details of any genetic testing they have had - if asked to do so. At the moment companies guarantee to ignore the results when setting premiums if you want a policy giving enough insurance to cover a mortgage of less than pounds 100,000. But this agreement will only last for two years, when the industry will look at it again.

Very few people actually have genetic tests now, because they will only show up illnesses like cystic fibrosis or Huntingdon's Chorea, which reflect defects in a single gene. But as research improves, forecasting the risk of other problems like rheumatoid arthritis and diabetes may become possible. Even testing a propensity to cancer or heart disease may be just a few years off.

Big insurers including Standard Life, Scottish Widows, Commercial Union and Royal Sun Alliance have been quick to announce that they are not going to ask whether potential customers have had genetic tests.

Doctors maintain that forced disclosure could easily ensure people do not take tests in the first place - as happened with HIV tests and Aids. Eventually, questions on whether people had had an HIV test disappeared from insurance forms, under pressure from the British Medical Association.

Peter Robertson, assistant general manager at Standard Life, says: "If anyone wants to take out an endowment policy designed to pay out pounds 100,000 or more, we'll usually want a doctor's report. It will contain details of height and weight, the age at which their parents died and so on. That provides most of the information genetic testing would give us."

Bupa and PPP, which together make up 70 per cent of the private medical insurance market, are taking the same line. PPP insists it will not ask for the results of genetic testing for the foreseeable future.

Genetic testing is relatively crude at present, but insurers' attitudes may change as it becomes more sophisticated. That said, environment and lifestyle play such a part in triggering illness that it will not be easy.

As things stand, 95 per cent of people get life insurance on standard terms while 4 per cent have premiums loaded for the extra risk they represent. One applicant in a hundred gets turned down. Widespread genetic testing may increase the number paying extra premiums, but it will also allow companies to offer better terms to everyone else.

Even now, working out the extra costs you face as a result of a problem such as diabetes is almost impossible. "Loadings depend on the insurer, the kind of life insurance you want and how serious your diabetes happens to be," says Penny O'Nions, a doctor turned independent financial adviser. "If you take out a 'term' policy to pay out if you die within a fixed 10 or 15 years, you may pay 10 to 25 per cent more than usual.

"Endowment plans are different as most of your funds go into investment, and relatively little into providing life insurance. That ensures insurers will not load premiums nearly so heavily."

Actuaries spend their lives putting figures on risk levels - but even if genetic testing could find a cancer gene, that would not necessarily help them. For instance, cancer of the prostate usually hits older people - often after their life insurance policy has finished its term.

Last week's announcement by the ABI was a holding operation. Many people in the insurance industry say privately that if genetic testing becomes so sophisticated it can spot risk levels on serious illnesses, it may become as standard as a blood test in 10 to 15 years' time.

Even now, anyone with a potential medical problem should probably deal through a specialist independent financial adviser rather than buy life cover direct from a company. If one insurer rejects you, others may follow. And in the brave new world of genetic testing, specialist help will be still more important.

q Contacts: Penny O'Nions (de Havilland Amersham), 01494 726688; George Connolly (Healthcare Matters), 01300 320222; John Joseph Medical Partnership, 0171 487 4111.

Start your day with The Independent, sign up for daily news emails
Suggested Topics
News
peopleHere's what Stephen Fry would say
News
i100
Sport
Serena Williams holds the Australian Open title
sportAustralia Open 2015 final report
Sport
footballLive: All the latest from today's Premier League matches
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Thorn in our side? Some in the pension industry are warning of chaos in the run-up to 6 April

Simon Read: "Pension freedom is months away but if we don't act soon, the freedom may be to make an expensive mistake with our future"

The introduction of the new pension freedoms has been "alarmingly chaotic", reckons Nigel Green, chief executive of the financial consultancy deVere Group, He said this week: "The implementation of changes appears to be being rushed in a cynical attempt to woo older voters ahead of May's election."

The total bill for the scandal could top £24billion

City Watchdog to investigate banks' handling of PPI compensation claims

There has been continued criticism of banks' delaying tactics and failure to find those affected by by the UK’s biggest-ever financial mis-selling scandal

The new rules will come into effect on 6 April

Pension firms must ask consumers more questions, says City Watchdog

Companies will be required to ask about health and lifestyle choices or marital status, to protect consumers who do not take up the government’s offer of the Pension Wise guidance guarantee service

Simon Read: Frozen in time - the expat British pensioners who deserve a better deal

I had dinner with the pensions minister Steve Webb this week. There was a wide-ranging discussion about the new pensions freedoms starting in April, and changes to the state pension. Crucially, I also got to ask Mr Webb whether he had any plans to have another look at the injustice that is frozen pensions.

Number of serially under-performing investment funds has increased by a fifth, survey reveals

The new Spot the Dog survey shows that even famous fund managers, holding billions of pounds of our money, can make mistakes

Mark Dampier: We always bring down Britain. But there's plenty in the tank

While the health of the economy is not insignificant, Mark Dampier finds it incredibly unpredictable in terms of its impact on the stock market

If you haven’t switched supplier or tariff in the last 12 months then you could almost certainly save money by doing so

There are easier ways to save hundreds on your energy bills

A new free app is aimed at the three-fifths of Brits who have never switched supplier

Worse hit are loyal customers with long-standing accounts – their loyalty is rewarded with lower interest rates than more recently-launched accounts

Savers are being let down by banks and building societies, says Financial Conduct Authority

Regulator’s investigation into the market found that around £160bn was held in easy access savings accounts that pay interest lower or equal to BoE base rate

What to do if you're facing repossession: However far you fall, you're not on your own

Helen Fisher had to become a 24-hour carer, and then she faced repossession. But going to the right places for help changed everything, writes Simon Read

Simon Read: Information is power. And it's in the wrong hands when people are cold-called by companies that know they're in debt

In debt? You're likely to be targeted by unscrupulous companies that hope to profit from your misfortune. They may try to pretend to be your friend by offering what they call "help" – but almost certainly that help will come with a cost and leave you worse off than you were before they got in touch.

Mark Dampier: So you've got pension freedom... will it end up as a cold shower?

In less than three months' time radical changes to pensions will take effect, providing investors with more freedom. Yet for those who prefer to make their own investment decisions, the choice of funds available is overwhelming. And an income drawdown account is also not particularly easy to manage.

The move marks the culmination of a long campaign by debt charities and insolvency firms and follows a call for evidence launched by the Minister last August

Bankruptcy rules to change, Business Minister announces

The minimum amount for which you can be forced into bankruptcy is being raised from £750 to £5,000

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Software Development Manager

    £40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Product Manager - (Product Marketing, Financial Services)

    £30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee