Can genetic testing influence your critical illness insurance rates?

Genetic testing critical illness insurance

Critical illness insurance has been around in Canada for over a decade now, yet only roughly 10% of Canadians have this protection in place. Now, new legislation regarding genetic testing introduced last year, has Canadians taking control of their health and looking to add critical illness insurance to aid with the financial protection.

On May 4, 2017, Bill S-201 became law, prohibiting the use of genetic test results for underwriting an insurance application or adjudicating a policy claim. Bill S-201 defines a genetic test as a test that analyzes DNA, RNA or chromosomes for purposes such as the prediction of disease or vertical transmission risks, or monitoring, diagnosis or prognosis. The penalty for breaking this law is a fine of up to 1 million dollars and imprisonment for up to 5 years. The law went into effect immediately.

Fast forward to today; genetic tests are helping Canadians better understand their health concerns and are more widely used within the medical community. One of the better known genetic testing companies is called 23andMe. For about $250, you’ll receive a comprehensive understanding of your genetics with over 75 online reports on your ancestry, traits, and health. What you do with the information, is now up to you.

Let’s assume you decide to undergo a genetic test and you discover you have the BRCA1 or BRCA2 gene. These genes have been found to impact a person’s chances of developing certain cancers, including breast, ovarian, and prostate cancer. The next step from here is educating yourself on these genes and trying to seek out ways to insulate you and your family financially, should you be diagnosed with cancer. Looking to critical illness insurance as a possible solution is one way you can achieve this.

Critical illness insurance is payable as a lump sum, tax-free benefit and covers over 30 illnesses and conditions, depending on the policy. This coverage can be purchased to help protect your lifestyle and your family. According to studies, allowing you and your spouse to take time away from work helps recover from a severe illness. Furthermore, it’s estimated that around 80% of all critical illness insurance claims currently being made are from the big 3: Heart-attacks, having a stroke or being diagnosed with life-threatening cancer. Other types of cancer that are non-life-threatening may also be subject to a partial payout.

Options to purchase this product include buying a term 10 or term 20 critical illness insurance policy that can help ease the financial cost of owning such significant coverage. These types of term policies allow you to have the coverage in place you need, at an affordable monthly price. For example, a monthly premium for a 10-year, $100,000 policy for a 40-year-old non-smoking male, is $40 on average. That rises to about $90 a month for a 50-year-old male non-smoker.

As mentioned, the benefits payable are tax-free, and you can use the money any way you choose. You can pay off your debts or mortgage, help replace your income, seek alternate treatment outside of Canada, or even start your own charity. Owning this type of coverage affords you the opportunity to truly focus on your health and your recovery, not on things like work or the financial stress it can cause your family.

However, it’s not just critical illness insurance that Bill S-201 impacts. It applies to any coverage in Canada that requires underwriting which includes life insurance, disability insurance, and long-term care insurance. There are many different types of coverage that a person should look at when understanding their insurance needs. It’s not just a one size fits all solution and often involves sitting down with an advisor to determine your own needs.

So, what should you do if you’ve recently disclosed your genetic testing information to your advisor? That information cannot be collected for underwriting purposes, and a good advisor should know to omit it. Contact us today if you’d like to learn more about how advisors at Karma Insurance can help you understand your insurance options and your rights.