Life Insurance Options For Canadians Living With Cancer

Life insurance is a crucial financial safety net for families and individuals, and it can be particularly important for those facing serious illnesses like cancer. In Canada, cancer is the leading cause of death, and many residents wonder if they can get life insurance if they have this disease. The short answer is yes, but there are several factors that come into play when determining eligibility and cost. This includes the type of cancer, the stage of diagnosis, and the individual's health history.

Guaranteed issue life insurance

One of the key advantages of guaranteed issue life insurance is that it eliminates the need for a medical exam, making it accessible to those with pre-existing health conditions or concerns about undergoing medical tests. The application process is straightforward and hassle-free, and almost everybody who applies gets approval. This makes it a good option for people who don't qualify for any other life insurance policy.

The premiums for guaranteed issue life insurance are significantly higher than traditional life plans, and the coverage amounts are typically very low, often not more than $25,000. Additionally, there is usually a waiting period of at least two years before the full payout is released. During this waiting period, if the insured person passes away, the insurance company will refund the premium amount paid, plus interest, to the beneficiary.

Despite the higher cost and lower coverage, guaranteed issue life insurance provides peace of mind and financial protection for individuals who may otherwise be unable to secure coverage. It serves as a solution for Canadians who face challenges in obtaining traditional life insurance due to age or health issues.

Examples of Guaranteed Issue Life Insurance Providers in Canada

• CoverMe® Guaranteed Issue Life Insurance: Offers permanent life insurance protection with guaranteed acceptance, no health questions, and no medical exam. It provides additional coverage in case of accidental death before age 85 and a one-time cash advance if the policyholder is terminally ill with 12 months or less to live.
• TD Guaranteed Acceptance Life Insurance: Available to Canadian residents between 50 and 75 years old, offering coverage ranging from $5,000 to $25,000. It provides benefits such as a tax-free lump sum paid to the beneficiary, a compassionate advance living benefit, and an accidental death benefit.
• Canada Protection Plan's Guaranteed Acceptance Life: Offers coverage of up to $50,000 for individuals aged 18-75. It includes benefits such as a terminal illness benefit, a transportation benefit, and an optional accidental death benefit.
• Assumption Life's Bronze Protection Life Insurance: Provides term life and permanent life insurance options with fewer medical requirements. Coverage is available for individuals aged 18-80, with amounts up to $50,000. It includes a living benefit, a transportation benefit, an accidental death benefit, and the option for reduced paid-up coverage after the fifth policy year.
• CIBC's Guaranteed Acceptance Life Insurance: Offers coverage in increments of $5,000, up to $25,000, for Canadian residents aged 40-74. It features locked-in premiums for non-smokers, accidental death coverage, and an optional living benefit for those diagnosed with a terminal illness.

Simplified issue life insurance

Who is it for?

• Do not want to undergo a medical exam
• Do not want to answer invasive questions about their health and lifestyle
• Want quick approval (within 2-3 days) without having to wait for up to six weeks

Traditional life insurance

If you have been diagnosed with cancer, it can be challenging to qualify for a new traditional life insurance policy. Traditional policies typically have an all-cause death benefit, meaning that no natural cause of death, including cancer, should disqualify you from coverage. However, if you are seeking a new policy after a cancer diagnosis, your application may be rejected, or you may face significantly higher rates.

Qualifying for Traditional Life Insurance

The likelihood of qualifying for traditional life insurance depends on several factors:

• Date of diagnosis: The longer you have been cancer-free, the more likely you are to qualify for traditional life insurance. Insurers may require a waiting period of up to ten years before offering a traditional policy.
• Cancer type: Cancers with higher survival rates or a lower chance of recurrence will improve your odds of being approved for a policy and qualifying for an affordable premium.
• Treatment, medications, and health: For traditional life insurance, you will need to provide details of your overall health, as well as the types of treatment you have received and their impact on your cancer.
• Lifestyle: Riskier lifestyles can lead to higher rates. Therefore, avoiding dangerous hobbies can help keep your premium from increasing.
• Family history: If your family has a history of cancer, you may pay a higher premium than someone with no history of the disease in their family.
• Relapses: Any relapses you have suffered may impact your ability to obtain traditional coverage.

Alternatives to Traditional Life Insurance

If you are unable to obtain traditional life insurance, there are alternative options available:

• Simplified issue and guaranteed issue policies: These policies, also known as no medical exam life insurance, do not require a medical exam and may not even involve health-related questions. While they come with higher rates and lower death benefits, they are a viable option for cancer patients who cannot obtain traditional coverage.
• Group life insurance: You may be able to access group life insurance through your employer, which can often be obtained in the form of a guaranteed issue policy.
• Specialty cancer insurance: This type of insurance is specifically designed for people diagnosed with cancer or cancer survivors. It covers death from cancer but has higher premiums compared to traditional life insurance.

Cancer insurance

There is usually no waiting period for cancer insurance, as long as the policy has been active for at least 90 days. The policyholder will receive the money as soon as they are diagnosed with a type of cancer covered by their policy.

Critical illness insurance covers a wider range of illnesses (anywhere from 3 to 30+), but it is more expensive and difficult to qualify for than cancer insurance. Critical illness insurance also places a stricter emphasis on the policyholder's smoking status and family health history. Given that cancer accounts for approximately 70% of critical illness cases, cancer insurance provides decent coverage at a more affordable price.

Drawbacks of cancer insurance

One drawback of cancer insurance is that some policies do not cover every type of cancer. For example, IA Excellence's Cancer Guard excludes Stage IA malignant melanoma, non-metastatic non-melanoma skin cancer, and Stage A (T1a or T1b) prostate cancer. Certain other cancers, such as breast cancer and prostate cancer, may be covered for an additional charge.

How to get cancer insurance

To get cancer insurance in Canada, you can contact an insurance specialist or broker, who will be able to help you find the best insurance option from the limited number of companies that offer it. You can also get a quote and apply online through some companies.

Factors affecting cancer insurance

Several factors will affect the type of cancer insurance you can apply for and the premiums you will pay:

• Time since diagnosis: The longer it has been since your cancer diagnosis and treatment, the lower your insurance premiums will generally be. If you have been in remission for several years, you may even be able to apply for traditional life insurance.
• Remission status: If you apply for Simplified Issue Life Insurance, you will be asked about your remission status and whether you have had any relapses. The time you have been in remission will affect your insurance premiums.
• Family history: If cancer runs in your family, your risk of developing cancer or having a relapse is greater, which will be reflected in your insurance premiums.

Group life insurance

Advantages of Group Life Insurance for Cancer Patients

• Guaranteed coverage without the need for medical exams or questionnaires.
• Higher coverage limits compared to other guaranteed issue policies.
• No waiting period, so your beneficiaries will receive the full death benefit if you pass away within the first two years of the policy.
• Reasonable rates, especially for older individuals.

Disadvantages of Group Life Insurance

However, there are also some potential drawbacks to consider:

• Higher coverage amounts may require medical underwriting, so cancer patients may not qualify for higher levels of coverage.
• Group life insurance is usually only available through employers or associations, so it may not be an option for everyone.
• The coverage may not be as comprehensive as traditional life insurance policies.

Other Options for Cancer Patients

In addition to group life insurance, cancer patients may also consider:

• Simplified issue life insurance: This type of insurance has a short health questionnaire and does not require a medical exam. It is a good option if you have been in remission for a few years.
• Guaranteed issue life insurance: This insurance has no medical requirements and guarantees coverage, but it comes with higher rates, lower coverage, and a two-year waiting period before full benefits are paid out.
• Traditional life insurance: If you have been in remission for more than five years, you may qualify for traditional life insurance, although it may be more difficult to obtain and may require a detailed questionnaire.

Frequently asked questions