The TERT-CLPTM1L region of chromosome 5p15.33 is a multi-cancer susceptibility locus that encodes the reverse transcriptase subunit, hTERT, of the telomerase enzyme. Numerous cancer-associated single-nucleotide polymorphisms (SNPs), including rs10069690, have been identified within the hTERT gene. The minor allele (A) at rs10069690 creates an additional splice donor site in intron 4 of hTERT, and is associated with an elevated risk of multiple cancers including breast and ovarian carcinomas. We previously demonstrated that the presence of this allele resulted in co-production of full length (FL)-hTERT and an alternatively spliced, INS1b, transcript. INS1b does not encode the reverse transcriptase domain required for telomerase enzyme activity, but we show here that INS1b protein retains its ability to bind to the telomerase RNA subunit, hTR. We also show that INS1b expression results in decreased telomerase activity, telomere shortening, and an increased telomere-specific DNA damage response (DDR). We employed antisense oligonucleotides to manipulate endogenous transcript expression in favor of INS1b, which resulted in a decrease in telomerase activity. These data provide the first detailed mechanistic insights into a cancer risk-associated SNP in the hTERT locus, which causes cell type-specific expression of INS1b transcript from the presence of an additional alternative splice site created in intron 4 by the risk allele. We predict that INS1b expression levels cause subtle inadequacies in telomerase-mediated telomere maintenance, resulting in an increased risk of genetic instability and therefore of tumorigenesis.