Genetic testing ban is now live for Australian life insurance

The change is especially relevant for business owners considering key person insurance, because these policies often involve individually underwritten cover for founders, directors, senior rainmakers or technical specialists. A genetic predisposition identified through testing should no longer be used to worsen the insurance offer, such as through a loading, exclusion or declined application. The reform applies across life insurance products including death cover, total and permanent disability, trauma and income protection, but it does not apply to health insurance.

For many Australians, the policy issue has always been bigger than insurance paperwork. Genetic testing can help people understand inherited health risks and make earlier medical, screening or lifestyle decisions. The concern was that fear of future insurance consequences could discourage testing. The new regime is intended to remove that barrier, while placing clearer legal obligations on insurers rather than relying only on industry self-regulation.

There are still important limits. The ban does not mean underwriting has disappeared, nor does it mean every application will be accepted on standard terms. Insurers can still consider medical history, current symptoms, diagnosed conditions, occupational risk, lifestyle factors and other information that is lawfully relevant to the policy being sought. Businesses should also remember that ownership, purpose, beneficiary arrangements, tax treatment and policy definitions remain central to whether cover is suitable for a particular continuity plan.

For companies reviewing cover, the practical takeaway is to separate three questions. First, who is genuinely critical to revenue, operations, debt servicing or client retention? Second, what financial disruption would follow if that person died, became permanently disabled or suffered a serious illness? Third, what existing resources, succession plans or insurance arrangements would reduce that exposure? A general tool such as the Keyman Insurance Calculator can help frame those assumptions, although it is not a personalised recommendation.

The reform should give more confidence to people considering genetic testing, but it also makes accurate non-genetic disclosure even more important. If a business is reviewing cover after the commencement date, the focus should be on clear records, current financial assumptions and careful reading of policy terms rather than assuming the law change removes all underwriting complexity.