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Simple Summary: This study examined the efficacy and diagnostic yield of founder variant testing as an initial screening method for individuals with a personal or family history of cancer. The results indicate that this approach is ineffective and has a limited ability to detect significant germline variants. Given these findings, we raise doubts about the benefits of employing such testing and suggest a transition from a two-step approach to expansive genetic testing. Founder pathogenic variants (PVs) are prevalent in Israel. This study investigated the current practice of offering cancer patients two-step genetic testing, starting with targeted testing for recurring founder PVs, followed, if negative, by next-generation sequencing. A total of 2128 subjects with cancer or a positive family history underwent oncogenetic testing with a panel of 51 recurring PVs at a tertiary medical center in March 2020–January 2023. Those with a known familial PV (n = 370) were excluded from the analysis. Among the remainder, 128/1758 (7%) were heterozygous for at least one variant, and 44 (34%) carried a PV of medium-high penetrance (MHPV). Cancer was diagnosed in 1519/1758 patients (86%). The diagnostic yield of founder MHPV testing was 2% in cancer patients and 4% in healthy individuals with a positive family history. It was higher in Ashkenazi Jews than non-Ashkenazi Jews and Arabs, but not over 10% for any type of cancer, and it was significantly higher in younger (<40 years) than older (>50 years) individuals (7% vs. 1%). Eighty-four of the heterozygotes (66%), mostly Ashkenazi Jews, harbored a low-penetrance variant (LPV) not associated with the diagnosed cancer, usually APC c.3902T>A. These findings question the advantage of two-step testing. LPVs should not be included in targeted testing because this can lead to an overestimation of the yield, and their detection does not preclude further comprehensive testing. [ABSTRACT FROM AUTHOR]