Cancer And Life Insurance: Can Policies Be Voided?

Cancer can be a worrying time for you and your loved ones, and it's understandable to want to ensure financial security for the future. If you have an existing life insurance policy and are diagnosed with cancer, it's important to check the terms and conditions of your policy. Most policies should cover you if you die, providing future financial support for your family. However, if you are seeking to purchase life insurance after a cancer diagnosis, it may be more complicated and could result in higher premiums.

Cancer diagnosis and life insurance

If you have cancer, you may find it more difficult to get life insurance. However, it is still possible to take out a life insurance policy after a cancer diagnosis, although the process may be more complicated and could result in higher premiums. The insurer will want to know more details before providing cover, such as the type and stage of cancer, as well as any treatments you have undergone. They may also request consent to contact your doctor to discuss your medical history.

If you already have a life insurance policy in place before your cancer diagnosis, the insurance company should honour it as long as you were honest about your medical history when taking out the policy. It may, however, become difficult to increase the value of your policy in the years following your diagnosis. It is important to keep up with your existing policy, as starting a new life insurance policy after a cancer diagnosis will be more challenging.

There are over 200 types of cancer, but the most common include breast cancer, lung cancer, prostate cancer, bowel cancer, skin cancer, and blood cancer. Life insurance covers death from any type of cancer, as long as the policy is active and premiums are paid. However, if you take out life insurance after a cancer diagnosis, it may qualify as a pre-existing medical condition, making it more complicated and expensive to obtain cover.

Should I tell my insurer if I get cancer?

Yes, it is important to be transparent about your medical history when applying for life insurance. Failing to disclose any pre-existing conditions may invalidate your policy, meaning your loved ones may not receive the financial support you intended. If you wish to renew your life insurance or increase your cover, you should inform your insurer about any changes to your health, including cancer diagnoses and treatments.

Most life insurance policies include terminal illness cover, which provides a payout if you are expected to live less than 12 months. This benefit is typically available regardless of the cause of the terminal illness, including cancer. However, be sure to check the specific conditions of your policy to confirm if terminal illnesses are covered.

Where can I get support?

If you have received a cancer diagnosis and are seeking support, organisations like Macmillan and Scottish Widows offer guidance and assistance during this challenging time.

Critical illness cover

Whether or not your critical illness cover will pay out following a cancer diagnosis may depend on the stage or grade of the cancer. Most advanced cancers are covered, and some policies may pay out a lower amount for some types of early-stage or slow-growing cancers.

When you buy critical illness cover, you will be asked about your health and the health of your close relatives, including parents and siblings. You can choose how much cover you want to buy and how you want to pay for the policy. You can opt for guaranteed premiums, where you pay the same monthly payment for the duration of the policy, or reviewable premiums, where your monthly payments are reviewed periodically and are likely to increase over time.

A critical illness lump sum can be used to pay off a mortgage, make changes to your home, or pay bills if you cannot work. If your type of cancer is not covered, you may still be able to claim if the cancer means you are unable to work. Some policies have a total and permanent disability clause, which might pay out if you are unable to do the same or similar work as before, or certain activities at work, such as lifting.

You can also add a waiver of premium benefit to some life insurance and critical illness cover policies. This will cover your monthly payments if you cannot work due to illness or injury.

Applying for life insurance with a family history of cancer

When applying for life insurance, the insurance company will ask if you have a family history of certain illnesses, including cancer. This is because people with a family history of cancer may be at a higher risk of developing the condition themselves. However, your personal health profile is a much larger factor in determining the cost of your life insurance.

If you have a family history of cancer, you will still be able to get life insurance coverage, but you may have to pay higher premiums. Life insurance companies use your family's medical history as an indicator of your future health risks when determining the cost of your premiums.

If you are applying for life insurance and have a family history of cancer, you will be asked specific questions about your immediate family's health history, such as whether any of your parents or siblings were diagnosed with cancer before the age of 60 or 70. The insurance company may also ask follow-up questions, such as which relative had cancer, their age at diagnosis, and whether they are still alive.

It's important to be honest about your family's medical history when applying for life insurance. Insurers will confirm your application against existing health records, and if they find that you have lied or misrepresented yourself, they may decline your application or cancel your policy due to life insurance fraud.

While having a family history of cancer may affect your rates with one insurer, you may still qualify for the best available rates with another. It all depends on your specific family history of cancer. For example, some insurance companies might consider you a higher insurance risk if your parents have had cancer, especially if you are the same sex as a family member who had a sex-specific cancer, like testicular cancer. However, some insurers might not see you as a higher risk if your family member survived a cancer diagnosis before the age of 60 or 65, or if they were diagnosed above the age of 65.

Additionally, if you are 65 or 70 years old, many insurers won't consider family history as part of your application process at all.

When it comes to life insurance for those with a family history of cancer, there is no specific policy that is more recommended than another. The best type of life insurance for you will depend on your needs. If you need coverage for your entire lifetime, consider whole life insurance. If you need coverage to protect your family as they grow up, term life insurance may be a better option.

It's important to work with an experienced independent life insurance agent, especially one specializing in impaired risk underwriting. They will know which insurance companies are more willing to insure individuals with a family history of cancer and can help you find the most affordable policy for your personal situation.

Pre-existing medical conditions and life insurance

Pre-existing medical conditions can make it more difficult and expensive to get life insurance, but it is still possible to find a policy that suits your needs. The specific policy types you qualify for will depend on your particular medical problems, how well your condition is managed, and the insurer.

When you apply for life insurance, a pre-existing condition is typically defined as any health problem that could reduce your life expectancy. Due to the added risk that pre-existing conditions create for insurers, some may raise your premium or even disqualify you entirely from certain types of life insurance. Common examples of pre-existing conditions include high blood pressure, diabetes, cancer, and asthma.

If you have a pre-existing condition, it is important to be honest with your insurance agent or broker about your medical history and condition. They can then advocate on your behalf with the insurance company. It is also important to discuss the steps you are taking to manage your condition effectively, so that the insurance company can take this into account when assessing your application.

There are a few things you can do to improve your insurability if you have a pre-existing medical condition:

• Follow your treatment plan: The better controlled your medical condition is, the less risk you pose to a potential insurer.
• Exercise regularly: Exercise helps to mitigate the factors that make a person risky to insure.
• Lose weight: Excess weight can affect your health, well-being, and life expectancy, so taking steps to lose weight can improve your insurability.

If you are denied coverage by a traditional insurance company due to your health, there are still other options available to you, such as group life insurance offered by your employer, or guaranteed issue life insurance.

Terminal illness and life insurance

Being diagnosed with a terminal illness can be a devastating shock, prompting you to consider your life insurance options to protect your loved ones financially. While a terminal illness does not prevent you from buying life insurance, your options are limited.

Types of Life Insurance for Terminally Ill People

If you have been diagnosed with a terminal illness, the only type of life insurance you can buy is a guaranteed issue life insurance policy. This is because life insurance carriers are in the business of risk assessment, and a terminal illness represents a high level of risk. These policies are simple and straightforward and can be a godsend if you are unable to qualify for other forms of life insurance. However, they are modest in size, with most capping at $25,000, and they are also quite expensive. If you are under 40, you may find it challenging to get a policy.

Application Process

The application process for guaranteed issue life insurance is simple and can be done from the comfort of your home. It does not include a medical exam, and you will not be asked any health questions. You will only need to provide basic information such as your social security number and beneficiary information. Once you submit your application and make your first payment, your policy will be issued and delivered, and it will become active.

Graded Benefit

Guaranteed issue life insurance typically includes a graded benefit, which means that the full death benefit will not be paid until a specific time period has passed, usually two years. If you die during this graded period, your premiums will be returned, usually with interest, or a percentage of your death benefit will be paid. If you outlive the graded period, your beneficiaries will receive the full death benefit.

Terminal Illness Benefit

Some life insurance policies include a terminal illness benefit, which pays out the full amount of the insurance cover when a policyholder is diagnosed with a terminal illness and is expected to live less than 12 months. This benefit allows the policyholder to make plans and take care of their dependents before their death. It is important to note that there will be no additional payout when the policyholder dies.

Critical Illness Cover

It is important to distinguish between terminal illness benefit and critical illness cover. While terminal illness benefit pays out when the policyholder is diagnosed with a terminal illness, critical illness cover pays out when the policyholder becomes ill with a condition that can be cured and is not likely to result in their death.

Existing Life Insurance Policies

If you already have a life insurance policy before being diagnosed with a terminal illness, that is excellent news. Your beneficiaries will receive the full death benefit. Additionally, you may be able to utilize the accelerated death benefit rider to access funds immediately.

Special Considerations

It is important to remember that insurance varies from person to person and from company to company. Make sure to carefully check what different companies offer and seek advice from a financial advisor to find the best option for your circumstances. Additionally, there are laws in place, such as the Disability Discrimination Act (DDA), to protect individuals from being treated unfairly due to their medical condition.

Frequently asked questions