#EveryoneNeedsaPlan: Genetic Testing Banned for Life Insurance

A Major Shift in Life Insurance – What’s Changed?

Australia has recently passed world-leading legislation banning life insurers from using adverse genetic test results to deny cover, increase premiums, or impose exclusions.

This reform, introduced through the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025, fundamentally changes how insurers assess risk.

Previously, life insurance in Australia operated on a risk-rated model, meaning insurers could consider genetic test results as part of underwriting decisions.
Now, that door has effectively been closed.

Why This Change Matters

For years, many Australians avoided genetic testing—even when medically recommended—because of one concern:

“If I get tested, will it impact my ability to get life insurance?”

That concern was valid.

Genetic tests can reveal a higher likelihood (not certainty) of developing conditions such as cancer or heart disease. But insurers often treated this as a definitive risk—leading to higher premiums or declined applications.

This legislation removes that fear.

It is designed to:

• Encourage people to undergo early genetic screening
• Support preventative healthcare
• Remove a key barrier to participation in medical research and treatment

What the New Law Actually Does

At its core, the legislation:

• Prohibits insurers from using adverse genetic test results in underwriting decisions
• Applies to decisions such as:
  • Whether to offer cover
  • How much cover to offer
  • What premium to charge
• Introduces penalties for insurers who breach the rules
• Aligns life insurance more closely with broader anti-discrimination principles

Importantly:

• Clients can still choose to disclose favourable results if it helps their application
• Diagnosed medical conditions (not just genetic risk) still need to be disclosed

What This Means for Clients and Insured Individuals

1. You Can Get Tested Without Fear

You no longer need to weigh up your health against your insurability.
Genetic testing can now be pursued purely for health and prevention, not financial risk.

2. Fairer Access to Life Insurance

Clients with a family history of illness are no longer penalised simply for their DNA.

3. Greater Certainty in Advice Planning

Financial planning strategies can now be developed without needing to “manage around” genetic test implications.

4. More Confidence in Early Intervention

Early detection of conditions (e.g. cancer risk) can lead to better health outcomes, without insurance consequences.

5. A Shift in the Adviser Conversation

Advisers can now:

• Encourage appropriate genetic testing
• Focus on proactive health and longevity strategies
• Remove a major behavioural barrier in client decision-making

What It Means for Insurers

While positive for consumers, this change does shift the landscape for insurers:

• Reduced access to predictive data
• Greater reliance on:
  • Medical history
  • Lifestyle factors
  • Actuarial pooling
• Potential for:
  • Slight upward pressure on premiums across the broader pool
  • Increased importance of underwriting discipline

However, the reform brings Australia in line with other global jurisdictions and improves trust in the insurance system.

A Broader Shift: From Risk Avoidance to Prevention

This legislation is not just about insurance—it reflects a broader shift in healthcare and financial advice:

• From reactive treatment → proactive prevention
• From fear-based decisions → informed choices
• From penalising risk → managing it intelligently

In practical terms, it allows Australians to take control of their health without compromising their financial security.

What Should Clients Do Now?

If you’ve previously avoided genetic testing due to insurance concerns, it may now be worth revisiting.

Equally, this is an opportunity to review:

• Your current life insurance structure
• Your long-term protection strategy
• Whether your cover aligns with your health and family situation

If you’d like to understand how this change impacts your personal situation, you can book a free financial assessment at mckfs.com.au.