Life Insurance Options Post-Cancer Diagnosis: What You Need To Know

A cancer diagnosis can be emotionally challenging for patients and their families. It can also bring financial stress, especially if cancer is the primary source of income for dependents. Life insurance can help cover burial expenses and offer living benefits that grant policyholders access to the death benefit while they are still alive. But can you get life insurance after a cancer diagnosis?

Life insurance companies' evaluation criteria

If you're looking to obtain life insurance after a cancer diagnosis, there are several factors that will determine your eligibility and the type of policy you can apply for. Here are the criteria that life insurance companies typically use to evaluate applicants with a history of cancer:

Date of Diagnosis

The time that has passed since your cancer diagnosis is a crucial factor. The more recent your diagnosis, the higher your premiums will be, and the fewer policy options will be available to you. Insurers often require a minimum of three to five years in remission before offering traditional life insurance policies. Some companies may have stricter requirements, such as a 10-year remission period for certain cancers.

Cancer Type

The type of cancer you've had significantly impacts your chances of obtaining life insurance. Cancers with higher survival rates or lower chances of recurrence will improve your odds of being approved for a policy and getting a more affordable premium. For example, non-melanoma skin cancers usually don't affect life insurance rates, while a diagnosis of pancreatic cancer might make obtaining coverage very difficult.

Treatment, Medications, and Health

When applying for traditional life insurance, you'll need to provide detailed information about your overall health, the treatments you've received, and their impact on your cancer. The specifics of your diagnosis and treatment will factor into the coverage you qualify for.

Lifestyle

Your lifestyle choices can also affect your life insurance rates. Engaging in risky activities, such as skydiving or scuba diving, can lead to higher premiums. Maintaining a healthy lifestyle by eating well and exercising can improve your chances of obtaining more affordable coverage.

Family History

If cancer runs in your family, it may result in higher premiums. When assessing your eligibility, insurers will often consider your family's medical history, including your parents and siblings.

Relapses

Any relapses or recurrences of cancer can negatively impact your ability to obtain traditional life insurance coverage. Insurers view relapses as an increased risk factor and may adjust your rates or eligibility accordingly.

It's important to note that each insurance company has its own set of criteria and qualifiers. While one insurer may offer you a traditional policy, another may deny your application. Therefore, it's recommended to shop around and compare policies from different companies to find the best coverage for your specific health situation.

Cancer type and its effect on policy availability

The type of cancer and the stage it has reached are significant factors that insurance companies take into account when assessing life insurance applications. Some cancers are considered lower risk than others, and this will influence your eligibility for coverage. For example, non-melanoma skin cancers usually don't affect life insurance premiums, whereas pancreatic cancer may make it nearly impossible to get coverage.

• Bladder cancer: 2 years
• Bone cancer: 5 years
• Breast cancer: 2 years
• Cervical cancer: 1 year
• Colon cancer: 2 years
• Kidney cancer: 3 years
• Lung cancer: 3 years
• Metastatic cancer: 5 years
• Ovarian cancer: 3 years
• Rectal cancer: 2 years
• Skin melanoma: 1 year

Basal cell carcinoma (skin cancer) is not usually limited by most insurers, whereas small cell lung cancer will likely result in a rejection due to its aggressive nature.

Insurance companies will also consider your treatment plan, response to treatment, overall medical history, age, and other health factors when assessing your application.

Policy options for cancer patients

A cancer diagnosis can be emotionally and financially challenging, and life insurance can help provide peace of mind for patients and their families. While finding life insurance after a cancer diagnosis may be difficult, there are several options available. Here are some policy options for cancer patients:

Guaranteed Issue Life Insurance

Guaranteed issue life insurance plans do not require a medical exam and generally do not ask any health questions. As a result, individuals currently undergoing cancer treatment or with a recent diagnosis may find this type of policy appealing. The main trade-off is that coverage amounts are typically low, usually maxing out at $25,000. Additionally, these plans often have graded death benefits, meaning beneficiaries may not receive the full death benefit payout if the insured passes away within two to three years of purchasing the policy.

Group Life Insurance

Group life insurance plans are often offered by employers and require little to no contribution from employees. However, the coverage amounts are usually limited, often based on the individual's salary, and the policy is not portable if the insured leaves their job.

Final Expense Life Insurance

Also known as burial or funeral insurance, final expense life insurance is designed to cover funeral costs and other end-of-life expenses. These policies typically have low coverage amounts, ranging from $5,000 to $25,000, and may be in the form of guaranteed issue plans without health requirements.

Simplified Issue Life Insurance

Simplified issue life insurance does not require a medical exam, but it may involve completing a short health questionnaire. This type of policy may be suitable for individuals who are cancer-free but do not have perfect health.

Traditional Term or Whole Life Insurance

Traditional term and whole life insurance policies are typically designed for individuals in good health. For cancer patients, these policies may be extremely expensive or even inaccessible. However, some insurers may reconsider offering these policies once the cancer has been in remission for a certain period, usually ranging from one to five years.

Cancer Insurance

In addition to life insurance, cancer insurance is a disease-specific policy that provides financial benefits to help cover medical and treatment costs associated with a cancer diagnosis. It is important to note that cancer insurance must be purchased before a cancer diagnosis or after a specified waiting period following remission.

Policy options for cancer survivors

If you are a cancer survivor, you may find it more challenging to obtain life insurance, and the options available to you will depend on your individual circumstances. Insurance providers will consider factors such as the type and stage of cancer, the time since treatment, and your overall health condition. Here are some policy options to consider:

Standard Life Insurance Policies

Even after a cancer diagnosis, some cancer survivors may still qualify for standard life insurance policies. These policies can provide financial protection for your loved ones in the event of your passing. It is important to note that the premiums for these policies may be higher due to the increased risk associated with cancer.

Guaranteed Life Insurance

Guaranteed life insurance is a type of policy that won't deny coverage based on pre-existing conditions, including cancer. Insurers offering guaranteed life insurance typically won't ask any medical questions or require you to submit your medical history. However, you may have to pay more upfront to balance out the risk involved.

Graded Benefit Policies

Graded benefit policies are another option for cancer survivors. These policies provide benefits that increase over time, often with lower initial payouts and higher payouts later on. This type of policy can be a good choice if you are concerned about the cost of premiums or if your health is improving following cancer treatment.

Term Life Insurance

Term life insurance covers you for a specific period, such as 10, 20, or 30 years. Within term life insurance, there are three main types: level term, decreasing term, and increasing term insurance. Level term insurance pays a fixed amount to your loved ones if you die within the term of the policy, while decreasing term insurance pays out a decreasing amount over time, often associated with mortgage payments. Increasing term insurance, on the other hand, increases the payout over the course of the policy, usually in line with inflation.

Whole Life Insurance

Whole life insurance covers you for your entire life and pays out a lump sum at whatever age you die. These policies tend to be more expensive than term life insurance but can provide peace of mind and financial security for your family.

When considering life insurance as a cancer survivor, it is essential to gather your medical records, understand the different policy options, and obtain quotes from multiple insurance providers. Working with an insurance broker who specialises in working with cancer survivors can also help you navigate the complexities of the insurance market and secure the most favourable rates.

Factors affecting life insurance cost

If you have been diagnosed with cancer, it can be challenging to qualify for a new traditional life insurance policy. However, it is not impossible, and there are several factors that can affect the cost of your life insurance.

Firstly, the type of cancer you have will play a significant role in determining your life insurance cost. Some cancers, such as non-melanoma skin cancers, usually do not affect the price of life insurance, while others, like pancreatic cancer, can make it extremely difficult to obtain coverage. The stage and prognosis of your cancer are also important factors, as they indicate the severity and potential impact on your health.

Secondly, the time since your diagnosis and treatment will also influence the cost of life insurance. Most insurance companies require a minimum period of remission before offering coverage, typically ranging from one to five years. The longer you have been cancer-free, the lower your risk level, which can lead to reduced premiums.

Thirdly, your overall health and lifestyle choices can impact the cost of life insurance. Maintaining a healthy lifestyle, avoiding risky hobbies, and refraining from tobacco use can help keep your premium from increasing. Additionally, your family history of cancer may also be considered, potentially leading to higher premiums if there is a history of the disease.

Lastly, the type of life insurance policy you choose can affect the cost. Traditional term and whole life insurance policies may not be available to you immediately after a cancer diagnosis, but you may be able to qualify for guaranteed issue, group life, or final expense life insurance. These policies typically have higher rates and lower death benefits, but they do not require a medical exam or health questions. Once you have been in remission for several years, you may be able to switch to a traditional policy with more affordable rates.

Frequently asked questions