Why Aussies are being denied insurance cover

HEARTLESS insurance companies have been accused of illegally denying essential cover to people for one shocking reason, putting hundreds of thousands of Australians at risk.

And genetics experts say new rules protecting hundreds of thousands of Australians at risk of genetic diseases from discrimination by insurance companies need to be toughened.

From July 1 life insurers can no longer request a person's genetic test results before setting their premiums but the rules only apply to life insurance for less than $500,000, illness cover of less than $200,000 and income protection of less than $4,000 a month.

However, a similar system in the UK applies to cover worth almost $900,000 and is backed by the UK government.

In a study published in the European Journal of Human Genetics Australian experts are demanding government oversight of Australia's new rules.

And they provide evidence that insurance companies have repeatedly breached previous rules around genetic testing by refusing cover to people who had undergone surgery and monitoring that reduced their cancer risk to less than the general population.

 

Genetic experts say insurance companies may have broken the law. Picture supplied.
Genetic experts say insurance companies may have broken the law. Picture supplied.


The insurance industry's Financial Services Council (FSC) which set the new rules said companies that breached them would be sanctioned but would not face financial or jail penalties.

The FSC's Nick Kirwan told News Corp the lower life insurance limits under Australia's system were due to the fact in the UK the sum insured decreased in real terms over the life of the cover while in Australia the amount insured increased over the term of the cover.

Australian law requires insurers who ask people for genetic test results to consider risk-reducing measures, including surveillance and surgery when setting premiums and insurers can only refuse cover on actuarial grounds.

 

Australians with genetic risks are being denied life insurance cover.
Australians with genetic risks are being denied life insurance cover.

 

New research by Monash University researcher Jane Tiller and Paul Lacaze surveyed 164 Australians with genes predisposing them to breast, ovarian, bowel and endometrial cancer.

Cancer risk reduction programs and preventive surgeries are available to help these people minimise their risk of developing cancer to just one per cent, less than the general population.

Sixty four people (eight in ten) in the study who sought new insurance cover had difficulty obtaining life insurance the study found.

And 32 people faced difficulty even though they had no history of cancer and had undertaken preventive surgery to reduce their risk of cancer.

"These represented possible cases of illegal discrimination," the authors said.

Mr Kirwan said anyone who felt an insurance company had discriminated against them could make a formal complaint with the company or take action through the Australian Human Rights Commission or the Australian Financial complaints Authority.

Pink Hope founder Krystal Barter said "while the (July 1) changes put us more in line with other countries, there remains more work to be done in ensuring patients are protected".

 

Wendy Nicol from Victoria has been repeatedly refused life insurance and income insurance because she carries a cancer-causing gene. Picture: Supplied
Wendy Nicol from Victoria has been repeatedly refused life insurance and income insurance because she carries a cancer-causing gene. Picture: Supplied

 

Melbourne operations manager and mum Wendy Nicol discovered she carried the cancer causing BRACA2 gene in 2011 and had insurance companies "shut down the phone call" when she tried to buy insurance.

After developing cancer two years later and having both breasts and ovaries removed she said she had found it impossible to purchase life insurance, income insurance or travel insurance.

"It makes me anxious having no income protection because I've got a good job and earn good money and have two kids at private school," she said.

"I work to pay the school fees and don't know how we'd pay if I lost my income," she said.

"I don't think it's fair," she said.

She plans to retest the rules after the July 1 changes to see if any insurer will offer her cover.