Why is family medical history needed when buying insurance?
All insurers ask about "family medical history"!
Since January 1, 2022, the Hong Kong Federation of Insurers (HKFI) has established a “Standard Underwriting Questionnaire” for medical insurance.
The Health Bureau also adopted this questionnaire as the standard questionnaire for Voluntary Health Insurance Scheme (VHIS).
In other words, all insurance companies (including Bowtie) have similar underwriting questions for VHIS. It also includes questions about “family medical history”!
Asking about "family medical history" benefits the Insured Person!
It is reasonable for the medical community to be concerned about “family medical history.” But why do insurance companies need this piece of information?
First, we need to understand what insurance is.
Insurance helps to transfer the risk of the policyholder to the insurer. When the policyholder pays the premiums, they transfer the potential financial loss from sicknesses/ accidents to the insurance companies.
After collecting the policyholder’s premiums, the insurance company would establish an insurance pool. And when accidents or illnesses occur, the insurance company can withdraw money from the insurance pool, and provide financial reimbursement for the policyholder.
Therefore, understanding the Insured’s “family medical history” can protect the fairness of all policyholders and maintain the “affordability of premiums.”
Suppose 5 Insureds are protected by the medical insurance from Company A, and one of them has a family history of colorectal cancer, making he/ she more likely to develop the disease, while the other four have no family medical history.
In other words, this Insured has a higher chance of needing reimbursement from the insurance company than the other 4.
If all 5 policyholders have to pay the same premiums, it would be unfair.
To maintain fairness for all Insureds, the insurance company needs to understand the health conditions of Insureds (including “family medical history”) to determine the actual premiums each of them needs to pay.
Using the above example, suppose the insurance company did not perform a “risk assessment” based on “family medical history,” and ends up all 5 policyholders paid the same premiums.
If the Insured with a family history of colorectal cancer actually develops the disease, this will result in continuous claims and shrink in the insurance pool.
In this case, to maintain the sustainability of the insurance product, the insurance company would have to charge higher premiums in the future to ensure there is enough money in the insurance pool for future compensation. All 5 policyholders would have to pay higher premiums to maintain coverage, resulting in unfairness and making it difficult for policyholders to afford insurance.
Therefore, a good insurance company must carefully examine “family medical history” during underwriting to avoid policyholders facing unfairness and long-term premiums increase.
The definition of family medical history
Which illnesses need to be reported?
According to the National Cancer Institute, “family medical history” refers to the relationship between family members and their medical histories, which may reveal certain disease patterns within a family.
From an insurance perspective, policyholders only need to report the specified medical history of “direct relatives” (including biological parents or siblings) aged 60 or younger, including:
- Cancer(s)
- Coronary heart disease
- Diabetes
- Motor neurone disease (MND)
- Multiple sclerosis
- Stroke
- Parkinson’s disease
- Genetic diseases
- Cystic fibrosis
- Familial adenomatous polyposis (FAP)
- Alzheimer’s disease
- Familial cardiomyopathy
- Hereditary blood disorders: hemophilia, thalassemia, sickle cell anemia
- Muscular dystrophy
- Polycystic kidney disease
- Huntington’s disease
To help our customers provide accurate information about “family medical history”, there is a multiple choice question related to family medical history inside Bowtie’s online underwriting system. Policyholders could simply answer by ticking the relevant choices honestly based on what they know about themselves/ families.
How does family medical history affect underwriting?
If the Insured has a family medical history, several scenarios may occur:
- They can be insured with standard premiums
- They may have to pay additional premiums (Loadings) due to family medical history
- They may have “exclusions” added due to family medical history
- Insurance companies may decline their applications
Since each Insured’s health status is different, the final underwriting result will vary depending on the individual’s situation. Thus, it is challenging to summarize a general approach in this article.
If you want to know if your health status and family medical history qualify for insurance, try Bowtie’s online underwriting process.
- *Except for People aged 65 or above purchasing Bowtie Pink Voluntary Health Insurance Scheme
Before completing underwriting, the policyholder is not required to provide any personal information. Even if additional premium loadings or exclusions would be added, or application is declined due to family medical history results, no “underwriting record” will be left behind.
Does a family medical history really increase the likelihood of getting sick?
According to medical research, “family medical history” does increase the risk of certain diseases, especially the following:
Breast cancer
According to breastcancer.org, if you are a female who has a direct female relative (i.e., mother or sister) with breast cancer, your risk of developing breast cancer is twice as high as other people. If two direct female relatives have breast cancer, your risk is five times higher.
Colorectal cancer
Many medical studies (including the Colorectal Cancer Alliance) have confirmed that one out of every four colorectal cancer patients has a “family medical history of colorectal cancer.”
- Note:The above data is for reference only. Different types of cancer or people in different regions have different risks of getting the above illness.
Using Bowtie as an example:
| Bowtie VHIS | ✔️ (Requirements on reporting family medical history are listed as above) |
| Bowtie Term Critical Illness (CI) | ✔️ (family medical history that needs to be declared is similar as that of VHIS) |
| Bowtie Term Life | ❌ |
| Bowtie Cancer Fighter | ✔️ (Only the insured person’s family history of cancer will be queried) |
| Bowtie Touchwood Protector | ❌ |
Different insurance companies have different underwriting questions and procedures. Generally, accident insurance policies do not require the insured person to declare their family medical history because it is not related to the insured items.
However, some life insurance policies from certain insurance companies may still consider the “insured person’s family medical history” when determining the premiums, whereas Bowtie Life Insurance has excluded “family medical history” from the underwriting process.
Regarding underwriting or claims issues related to family medical history
Generally, the insured person must rely on their family members to learn about their “family medical history,” so they only need to declare their family medical history honestly to the best of their knowledge.
Family medical history only needs to be declared at the time of application. If a family member develops a disease after the policy takes effect, there is no need to report it to the insurance company.
