How family ties affect insurance rates

01 August 2012 Dalene Allen, Altrisk

It is important that your clients understand the link between family health history and their own when taking out insurance cover. Family history is a good indicator of both the type and level of cover that your clients need, and also provides underwriters with a holistic view of their risk profile. Dalene Allen, underwriting director and co-founder of Altrisk looks at family health and its implications for insurance cover.

Families don’t just share genes - they also share their environment, lifestyles and habits. Thus, your client’s family history provides important clues into their own health and can indicate the need for screening and lifestyle adjustments. It can also affect decisions regarding insurance cover, by indicating a predisposition for certain conditions.

Genetic risks

Family history is one of many measures used by underwriters when assessing risk and is always considered with other factors. It is highly unlikely that family history will lead to higher premium rates in the absence of additional contributing risk factors.

The underwriter will balance the likelihood of your client’s history "repeating” by evaluating when the condition first occurred and who was affected. For example, if a great aunt suffered a stroke at age 70, it will not have as great a weighting as if the client’s mother suffered a heart attack at 50.

Conditions that run in the family

Illnesses such as diabetes, high cholesterol levels, heart disease, cystic fibrosis and certain types of cancers can run in families. If a close blood relative suffers any of these conditions - particularly before the age of 60 – there is an increased risk of your client contracting the same condition.

By noting the health of a client’s immediate relatives, an underwriter may identify risk factors that could affect their current or future health. For example, a client with raised blood pressure and high cholesterol levels has a greater chance of developing heart disease later in life if they have a family history of heart disease.

While it is accepted that both genetic and lifestyle factors play a role in an individual’s predisposition to contract a particular disease, an underwriter will look more closely if these risk factors coincide with a family history of disease.

Diet, exercise and medication

The risk factors associated with family history fall into two categories, fixed and variable. A variable risk is something that can be controlled by diet, exercise or medication. A fixed risk factor refers to genetic factors and family medical history.

If there is a history of early heart disease – occurring before age 60 – or breast cancer there is nothing your client can do to change this. An awareness of family history may have inspired your client to make dietary, medical and lifestyle choices to promote greater health. These are important considerations for the underwriter.

Asking about family history

Not everyone enjoys talking about their health, let alone that of their family. Be sensitive and remember these important points:

• Full disclosure is of paramount importance, so ensure that your client understands why you are asking about their family’s health and why accurate information is essential.

• Include as many family members as possible in the analysis, from parents and grandparents to siblings, aunts and uncles, cousins and your client’s children.

• When asking about specific health conditions, identify the onset age where possible. If a condition, such as heart disease or breast cancer was contracted earlier than is most commonly seen in the general population, family members may have a genetic susceptibility to that condition.

Important health clues

Family history cannot map out your client’s future health, but it provides important clues to assess risk. It is your duty to ensure that your client takes out the best cover they can afford based on their circumstances, including risk factors, lifestyle and family history.

Full client disclosure is essential as it influences the risk assessment, premium charged, terms and conditions of the final contract with the insurer.