Life Insurance After Chemotherapy: What You Need To Know

A cancer diagnosis can impact your ability to obtain life insurance, with many companies denying coverage for new policies to patients in treatment. However, there are alternative options available, and you may be able to qualify for a traditional policy after a few years of remission. The type of cancer, stage, treatment history, prognosis, and lifestyle factors can all influence your eligibility and premium costs. Chemotherapy, as a treatment history, will be considered by insurers when assessing your application.

Life insurance options after chemotherapy

If you've had chemotherapy, it can be challenging to qualify for a new traditional life insurance policy. However, there are still options available to you, depending on factors such as your prognosis, treatment, and time since diagnosis or remission. Here are some life insurance options to consider after undergoing chemotherapy:

Guaranteed Issue Life Insurance

Guaranteed issue life insurance, also known as no-exam life insurance, does not require a medical exam or health questions. It is designed for individuals with health problems and is generally more expensive with lower death benefits. The death benefit may also be graded, meaning your beneficiaries will not receive the full payout if you pass away within two to three years of purchasing the policy.

Simplified Issue Life Insurance

Simplified issue life insurance is for individuals with good or fair health and does not require a medical exam. You will only need to answer a few medical questions, and coverage can be obtained in a shorter time frame compared to traditional policies. However, premiums may be higher, and the death benefit may be lower.

Group Life Insurance

Some employers offer group life insurance plans that are either free or offered at a reduced cost as an employee benefit. This type of insurance is typically guaranteed and easier to qualify for since it is obtained through your employer. However, coverage amounts may be limited, and you will lose the policy if you leave your job.

Final Expense/Burial Life Insurance

Final expense life insurance, also known as burial or funeral insurance, is designed for older adults to cover funeral costs and end-of-life expenses. It may include a few health questions or be a guaranteed issue plan without health requirements. The coverage amounts are generally lower, and premiums can be higher.

Traditional Life Insurance

If you are in remission, you may be able to qualify for traditional life insurance again after a few years. The waiting period can vary depending on the insurance company and the type of cancer. Some cancers, like skin cancer or prostate cancer, may have shorter waiting periods. It's important to shop around and compare quotes from multiple insurers, as restrictions and costs can vary significantly.

Factors impacting life insurance eligibility

Life insurance eligibility is determined by a range of factors, and each insurance company will have its own specific qualifiers. Here are some of the key considerations:

Health and medical history

The state of your health is a significant factor in determining eligibility and the premium payable. This includes any serious health issues, diagnoses, and treatments, such as chemotherapy, that may impact your life expectancy. The insurer will want to assess your overall health picture and may request permission to contact your doctor or hospital for medical details. They may also ask you to undergo a medical examination.

Type of cancer and stage

The type and stage of cancer play a crucial role in insurance eligibility. Cancers with higher survival rates and lower chances of recurrence are viewed more favourably by insurers. The prognosis, treatment, and time since diagnosis or remission are also considered.

Family medical history

A history of cancer or other serious illnesses in your family can indicate an increased risk for you and may impact your eligibility and premium.

Lifestyle

Your lifestyle choices can affect your eligibility and premium rates. Riskier lifestyles and dangerous hobbies, such as skydiving, can lead to higher rates. Tobacco and alcohol use may also increase your risk for health complications, impacting your eligibility.

Relapses

If you have suffered any relapses or experienced treatment setbacks, this may negatively impact your eligibility for traditional coverage.

Time since treatment

The time elapsed since your last cancer treatment is a critical factor. Many insurers require a minimum waiting period before offering a policy, often around five years. However, this can vary depending on the insurer and the type of cancer.

Type of insurance policy

The type of insurance policy you are applying for also matters. Traditional insurance policies are more challenging to obtain if you have a history of cancer, especially if you are still undergoing treatment or have a terminal diagnosis. Alternative options, such as simplified issue, guaranteed issue, group life, and final expense insurance, may be more accessible during and immediately after treatment.

Existing insurance policy

If you already have a life insurance policy and are subsequently diagnosed with cancer, your coverage should remain in place as long as you continue to pay premiums and have been honest about your medical history. However, increasing the value of your policy may be difficult for a period of time.

Honesty in applications

It is crucial to be honest and upfront about your health status and medical history when applying for life insurance. Nondisclosure or providing false information may result in the denial of coverage or non-payment of death benefits.

Comparison shopping

Since eligibility criteria and costs vary across insurers, it is beneficial to shop around and obtain multiple quotes. Working with an experienced independent insurance agent who specialises in impaired risk underwriting can help you find the most suitable coverage for your specific circumstances.

Simplified issue and guaranteed issue life insurance

If you are ineligible for traditional life insurance, you can buy simplified issue or guaranteed issue life insurance, also known as no-exam life insurance. Unlike traditional insurance, which requires a detailed medical history and sometimes a medical exam, these policies will not deny you coverage because of pre-existing conditions like cancer.

Simplified Issue Life Insurance

Simplified issue life insurance is for those in good or fair health and does not require a medical exam. You will only have to answer a few medical questions. There is a minimal waiting period, providing coverage in days rather than weeks or months like traditional policies. According to Mark Friedlander, a spokesperson for the Insurance Information Institute, "If you are cancer-free but not in perfect health, simplified issue can be a good choice."

Guaranteed Issue Life Insurance

Guaranteed issue life insurance is geared towards those who are older or have health problems. It generally requires no medical information and guarantees a payout. However, the trade-off for easy approval is higher premiums and a lower death benefit due to increased risk. These plans sometimes have a graded benefit period, which means that if you die within a short time of purchasing the policy, your family won't receive the full death benefit.

Group life insurance

How to Get Group Life Insurance

If your employer offers group life insurance, you can typically sign up for coverage during open enrollment or when you're first hired. If you're a veteran or a member of certain organizations, you may also have access to group life insurance plans. Contact your HR department or the relevant organization to inquire about your options.

Benefits of Group Life Insurance for Cancer Patients

Limitations of Group Life Insurance for Cancer Patients

One limitation of group life insurance is that the coverage amounts are usually limited and based on your salary. Another downside is that you typically cannot keep the policy if you leave your job. Additionally, group life insurance may not offer as much coverage as other types of life insurance, such as term or whole life insurance.

Other Options for Cancer Patients

In addition to group life insurance, cancer patients may also want to consider guaranteed issue life insurance, which does not require a medical exam or health questions. However, coverage amounts are typically low, and there may be graded death benefits, meaning your beneficiaries won't receive the full payout if you pass away within a few years of purchasing the policy. Final expense life insurance, which covers funeral and end-of-life expenses, is another option for cancer patients.

Life insurance riders

• Guaranteed Insurability Rider: This rider allows you to purchase additional insurance coverage without the need for a medical examination. This is especially beneficial when there is a significant change in your life circumstances, such as the birth of a child, marriage, or an increase in income.
• Accidental Death Rider: This rider pays out an additional death benefit if the insured dies as a result of an accident. In the event of death due to accidental bodily injury, the insured's family receives twice the amount of the original policy.
• Waiver of Premium Rider: Under this rider, future premiums are waived if the insured becomes permanently disabled or loses their income due to injury or illness before a specified age.
• Family Income Benefit Rider: This rider provides a steady flow of income to family members in the event of the insured's death. It is generally purchased by individuals who are the sole breadwinners of their families.
• Accelerated Death Benefit Rider: This rider allows the insured person to access death benefits if diagnosed with a terminal illness that will considerably shorten their lifespan. Insurers may subtract the amount received, plus interest, from what the beneficiaries receive upon the insured's death.
• Long-Term Care Rider: This rider provides monthly payments if the insured needs to stay at a nursing home or receive home care. It covers long-term care costs that may not be covered by a standard policy.
• Return of Premium Rider: Under this rider, you pay a marginal premium, and at the end of the term, your premiums are returned to you in full. In the event of death, your beneficiaries will receive the paid premium amount.
• Child Term Rider: This rider covers your children on your policy instead of purchasing separate policies for them. It pays a small death benefit if a child dies before reaching a certain age, usually around 25 years old.
• Term Conversion Rider: This rider allows you to convert a term life insurance policy into a whole life policy near or at the end of the term.
• Cost of Living Rider: This rider gradually increases your policy's coverage over time to keep up with inflation. Your premium will also increase alongside the coverage amount.

It's important to note that adding riders to a life insurance policy may increase your premium, but not always. Riders typically need to be added when purchasing the policy, so consider your needs carefully before buying.

Frequently asked questions