Orlando Harmon
A cancer diagnosis can make it more difficult to obtain life insurance, and the same is true of mortgage life insurance. However, it is not impossible to get coverage. The likelihood of being approved for mortgage life insurance depends on several factors, including the type and stage of cancer, as well as the applicant's prognosis. Some insurers may also require a medical examination before issuing a policy. It is worth noting that the premiums for those with cancer are typically higher due to the increased risk, and this is known as loading.
| Characteristics | Values |
|---|---|
| Can I get mortgage life insurance if I have cancer? | It depends on the type, stage, and grade of cancer. |
| What factors do insurance companies consider? | Type, grade, and stage of cancer, length of time since last treatment, and prognosis. |
| Do I need to disclose my medical history? | Yes, insurance companies will ask questions about your medical history and may request a medical examination. |
| Will my cancer diagnosis affect the cost of premiums? | Yes, a cancer diagnosis typically results in higher premiums due to the increased risk for insurance companies. |
| Are there alternatives if I cannot get mortgage life insurance? | Yes, consider a guarantor or mortgage payment protection insurance. |
What You'll Learn
Life insurance and cancer diagnosis
A cancer diagnosis can significantly impact an individual's ability to obtain life insurance and secure their financial future. While a cancer diagnosis does not necessarily preclude individuals from obtaining life insurance, it can make the process more challenging and expensive. Here are some essential things to know about life insurance and a cancer diagnosis:
Impact on Life Insurance Applications
A cancer diagnosis can make it harder to get approved for life insurance. Insurance companies consider the type, stage, and grade of cancer, as well as the applicant's treatment status and prognosis. Most insurers will not offer a policy to someone still undergoing cancer treatment. The time since the last treatment and the likelihood of recovery also play a role in the insurance company's decision. Each application is assessed on a case-by-case basis, and there are no definite guidelines for these situations.
Higher Premiums
If a life insurance policy is offered to someone with a history of cancer, the initial premiums are typically higher. This is because the insurance company's risk is highest during this period. As time passes and the chances of cancer recurrence decrease, the risk to the insurer reduces. This phenomenon is known as "loading," where higher premiums are charged due to increased risk.
Disclosure of Medical History
When applying for life insurance, it is crucial to be transparent about your medical history. Insurance companies will usually contact your hospital consultant or doctor to gather information about your cancer type, grade, stage, treatment history, and prognosis. They may also request a medical examination before issuing a policy. It is essential to provide accurate and comprehensive information to ensure the policy meets your needs.
Existing Life Insurance Policies
If you already have a life insurance policy 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. However, you may find it challenging to increase the policy's value for some years after the diagnosis. It is generally recommended to maintain the existing policy rather than start a new one after a cancer diagnosis.
Special Rules and Protections
In some countries, special legislation protects individuals with cancer or a history of cancer when applying for insurance. For example, the Disability Discrimination Act (DDA) in the UK applies to individuals with cancer or a history of cancer. Additionally, insurance companies cannot legally access genetic test results from applicants, as outlined in Part 4 of the Disability Act (2005) in Ireland.
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Mortgage Critical Illness Insurance
Who Can Apply?
The availability of Mortgage Critical Illness Insurance varies by country. In Canada, for example, residents between the ages of 18 and 55 can apply for this insurance with the financial institution with which they have a mortgage. On the other hand, in the UK, people with cancer may find it more difficult to get life insurance, and the options available depend on factors such as the type, stage, and grade of cancer, as well as the individual's prognosis.
Conditions for Approval:
To be approved for Mortgage Critical Illness Insurance, you typically only need to answer a few health-related questions, and a medical examination is usually not required. If you answer 'No' to the health questions and your mortgage is below a certain limit, you will likely be approved. Answering 'Yes' to any health questions does not mean automatic rejection; it simply prompts the insurer to contact you for more details.
Cost of Mortgage Critical Illness Insurance:
The cost of this insurance depends on your age and the amount of coverage you want. The older you are and the higher the coverage, the more you will pay in premiums.
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Mortgage lenders and insurance
A cancer diagnosis does not mean that you cannot get a mortgage. However, a lender will need to be assured that you can pay back the loan. They will ask questions about your income and may be cautious about lending if they see gaps or changes in your earnings. It is always a good idea to try a few different mortgage lenders and explain your circumstances so that you can get the best advice and find the right deal for you.
A mortgage lender will not generally ask you to give them your medical history. However, they may want you to protect the loan with insurance, and you will need to disclose any medical conditions to the insurer.
Without insurance, if you had to stop working due to illness and were unable to keep up with your mortgage repayments, your mortgage lender could repossess your house.
Mortgage Critical Illness Insurance pays out the outstanding balance on your mortgage, whether you can work or not, if you are diagnosed with a covered critical illness. This type of insurance is available to Canadian residents between 18 and 55 years of age and can be purchased through the financial institution with which the individual has a mortgage.
If you already have life insurance and are then diagnosed with cancer, the insurance company should honour the policy as long as you were honest about your medical history when taking it out. You may find it difficult to increase the value of your policy for some years after your diagnosis, but it is important to keep it up as it will be easier than starting a new policy.
Insurance varies from person to person and company to company. A good financial adviser will check all the rates for you and recommend the best deals for your circumstances. It is important to carefully review the insurance regularly to ensure that it keeps up with your changing personal and financial circumstances.
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Insurance premiums and cancer
If you have cancer or have had it in the past, you may find it more difficult to get life insurance. Insurance companies take into account several factors, including the type of cancer and the stage it is at. The first premiums are usually high because that is when the insurance company is at the greatest risk. Over time, as the risk of the cancer returning decreases, the premiums may reduce.
If you already have life insurance and are diagnosed with cancer, your insurance company should honour the policy as long as you were honest about your medical history when taking it out. However, you may find it difficult to increase the value of your policy for some years. It is important to keep up the existing policy as starting a new one after a cancer diagnosis will be challenging.
If you are thinking of buying life insurance after a cancer diagnosis, it is recommended to consult an independent financial advisor or insurance broker. They can help you find the right insurance for your situation. There are different types of life insurance available, and the premiums vary accordingly. Here are some common types:
- Level term insurance: This type of insurance pays a fixed amount to your loved ones if you die within the term of the policy. The amount paid out is fixed at the start and does not change.
- Decreasing term insurance: The payout to your loved ones decreases over time with this type of insurance. It is often taken out with a mortgage.
- Increasing term insurance: The amount paid out increases over the course of the policy, usually in line with inflation.
- Whole of life insurance: This type of policy covers you for your whole life and can be more expensive. It pays out a lump sum whenever you die.
- Family income benefit insurance: This type of life insurance pays out a regular income to your loved ones instead of a one-off lump sum.
- Endowment policy: This is a long-term investment product that includes a life insurance policy. You pay a monthly amount for a set term and receive a cash lump sum at the end. Part of the premiums is invested in shares or property.
It is important to carefully review the insurance policy to ensure it meets your needs and keep it under regular review to ensure it keeps up with your changing circumstances.
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Cancer and insurance underwriting
A cancer diagnosis does not mean that you will be unable to obtain a mortgage or life insurance, but it is likely to become more difficult and expensive. The impact of a cancer diagnosis on insurance underwriting depends on several factors, including the type and stage of cancer, the treatment received, and the patient's current health.
Life Insurance
Life insurance companies take into account various factors when assessing the eligibility and premiums for individuals with cancer. These factors include the type and severity of the cancer, the stage and grade of the cancer, the patient's age, family history, genetic predisposition, treatment history, and prognosis. In some cases, insurers may request medical details from the individual's doctor or hospital and may also require a medical examination before issuing a policy.
For individuals currently undergoing cancer treatment, the options for traditional life insurance coverage are limited. Final expense insurance, which provides a lower amount of coverage for medical expenses or funeral costs, may be an option during treatment. However, individuals in remission may have more options for life insurance coverage, depending on their diagnosis and the time since their last treatment.
The National Cancer Institute's "Surveillance, Epidemiology, and End Results" (SEER) database is a valuable resource for insurers when assessing the eligibility and underwriting guidelines for individuals with cancer. This database contains anonymized information on the treatment and outcomes of millions of cancer patients.
Mortgage Insurance
Mortgage insurance is not mandatory, but it can provide valuable protection in the event of serious illness or death. The availability and cost of mortgage insurance will depend on similar factors as life insurance, including the type and stage of cancer, treatment, and current health. It is important to carefully review the coverage and exclusions of any mortgage insurance policy before purchasing it.
Tips for Obtaining Insurance with Cancer
- Get quotes from multiple insurance companies: Different companies have their own underwriting guidelines, so it is worth comparing rates and coverage options.
- Work with a specialized agent: An independent insurance agent specializing in high-risk life insurance or cancer insurance can help navigate the complex underwriting processes and find the most suitable coverage.
- Be transparent: Provide accurate and detailed information about your medical history, treatment, and current health status to ensure accurate underwriting assessments.
- Review and compare policies: Carefully review the terms, conditions, and exclusions of any insurance policy before purchasing it. Understand the coverage, limitations, and potential extra charges.
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Frequently asked questions
It depends on the type, stage, and grade of your cancer. Most insurers will not offer a policy to someone who is still undergoing cancer treatment. However, if you have recovered from cancer, it is possible to obtain mortgage life insurance, although you may have to pay higher premiums.
Insurance companies will consider the type, grade, and stage of cancer, the length of time since your last treatment, and your prognosis. They may request information from your hospital consultant and ask you to undergo a medical examination.
Yes, you may consider mortgage critical illness insurance, which pays out the outstanding balance on your mortgage if you are diagnosed with a covered critical illness, regardless of your ability to work. Another option is mortgage disability insurance, which covers your mortgage payments if you are unable to work due to a severe injury or illness.
If you already have a life insurance policy before being diagnosed with cancer, the insurance company should typically honour it as long as you were honest about your medical history when taking out the policy. It is important to continue paying into this policy, as starting a new life insurance policy after a cancer diagnosis can be challenging.
