Cancer Diagnosis: Life Insurance Premiums, What To Expect?

does life insurence increase if you get cancer

Life insurance is more difficult to obtain after a cancer diagnosis, and it may also affect the type of policy you apply for. If you've been treated for cancer in the last five years, you may find that your rates are significantly higher for traditional term and whole life insurance policies, or your application may be rejected. If you're currently undergoing treatment, your only option is a guaranteed issue life insurance policy, which does not take your health into consideration and is more expensive. However, if you've been in remission for several years, you may be able to qualify for traditional types of life insurance, although your rates will likely be higher.

Characteristics Values
Impact on ability to purchase life insurance Being diagnosed with or treated for cancer will typically impede your ability to purchase traditional life insurance.
Exceptions Non-melanoma skin cancers usually don't affect the price of life insurance at all.
Waiting period You typically need to be in cancer remission for a minimum of five years to qualify for newly issued term life insurance, whole life insurance or other types of coverage.
Cost You can expect to pay two to four times more for a term life or whole life insurance policy than a healthy individual without cancer.
Coverage Cancer patients typically only qualify for guaranteed issue policies with limited coverage and restricted payouts for the first few years.

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Cancer diagnosis and life insurance premiums

A cancer diagnosis can make it more challenging to obtain life insurance, and it may also affect the type of policy you can apply for. If you have been diagnosed with cancer, it is important to review your existing life insurance policy or ensure that any new policy suits your needs.

Qualifying for Life Insurance After a Cancer Diagnosis

Being diagnosed with or treated for cancer can impede your ability to purchase traditional life insurance. The likelihood of qualifying for life insurance depends on the type of cancer, the chance of recurrence, and the length of time since your last treatment. If you are currently undergoing treatment, your only option may be a guaranteed issue life insurance policy, which does not consider your health status.

Cancer patients who cannot obtain traditional coverage may still qualify for simplified issue and guaranteed issue policies, also known as no medical exam life insurance. These policies have higher rates and lower death benefits than traditional policies, but they do not require a medical examination. Once your cancer has been in remission for several years, you may be able to switch to a traditional policy with more affordable rates.

Factors Affecting Eligibility for Traditional Policies

The following factors may influence your eligibility for traditional life insurance policies:

  • Date of diagnosis: The more recent the cancer diagnosis, the higher the rates and the fewer policy options available. Insurers typically require a waiting period of a few years, often five years, before offering traditional life insurance.
  • Cancer type: Cancers with a higher survival rate or a lower chance of recurrence are viewed more favorably by insurers. Non-melanoma skin cancers usually do not affect life insurance rates, while pancreatic cancer may make obtaining coverage extremely difficult.
  • Treatment, medications, and health: For traditional life insurance, insurers will consider your overall health, the types of treatment received, and their impact on your cancer.
  • Lifestyle: Riskier lifestyles and dangerous hobbies can lead to higher insurance rates.
  • Family history: A history of cancer in your family may result in higher premiums.
  • Relapses: Any relapses or recurrence of cancer can negatively impact your ability to obtain traditional coverage.

Tips for Improving Your Chances of Getting Life Insurance After Cancer

To increase your chances of obtaining life insurance after a cancer diagnosis, consider the following:

  • Work with an experienced independent life insurance agent who specializes in impaired risk underwriting.
  • Improve your overall health by adopting a healthy diet and exercising.
  • Avoid tobacco use, as life insurance quotes for smokers are typically much higher.
  • Engage in a low-risk profession, as certain occupations may result in higher premiums.
  • Refrain from risky hobbies like mountain climbing, skydiving, and scuba diving, as these can increase your rates.
  • Maintain a clean driving and criminal record, as DUIs, arrests, and criminal convictions may affect your rate or disqualify you from coverage.

Life Insurance for Cancer Patients

If you are a cancer patient, your options for life insurance may be limited. Most term and whole life insurance policies are not available to current cancer patients, and your application may be rejected. Your best options are guaranteed whole life insurance policies or group life insurance, which can be guaranteed issue.

Guaranteed life insurance, also known as burial insurance, offers lifetime coverage and does not disqualify you for health issues. However, these policies have higher premiums, limited death benefits, and waiting periods of two to three years. Group life insurance may be available through employers or certain organizations, and it is often guaranteed issue up to a certain amount of coverage.

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Impact of cancer on insurance claims

A cancer diagnosis can have a significant impact on a person's ability to obtain life insurance, as well as the cost and type of coverage available to them. While it is not impossible for cancer patients or survivors to obtain life insurance, it can be challenging and expensive. The impact of cancer on insurance claims and coverage options can vary depending on several factors, including the type and stage of cancer, the person's health status, and the insurance company's policies.

Qualifying for Life Insurance with Cancer

Being diagnosed with cancer or having a history of cancer can make it difficult to qualify for a new traditional life insurance policy. The likelihood of obtaining coverage depends on various factors, including the type of cancer, the stage of the disease, and the time since diagnosis or treatment. Some types of cancer, such as non-melanoma skin cancer, may not affect the price of life insurance, while others, like pancreatic cancer, may make it challenging to obtain coverage.

Higher Rates and Limited Options

Cancer patients and survivors often face higher rates for life insurance. The increased cost can be significant, with premiums potentially doubling or tripling compared to healthy individuals without cancer. Additionally, cancer patients may only qualify for specific types of policies, such as guaranteed issue or simplified issue life insurance, which tend to have lower coverage limits and higher premiums. These policies may also have graded death benefits, where beneficiaries receive a reduced payout if the insured passes away within the first few years of the policy.

Waiting Periods and Remission

Insurance companies typically require cancer patients to be in remission for a minimum period before qualifying for traditional life insurance policies. This waiting period can range from two to five years or more, depending on the type of cancer and the insurer's requirements. During this time, cancer patients may have to opt for more expensive policies that do not require a medical examination or health questions. Once the waiting period is over, it may be possible to switch to a traditional policy with more affordable rates.

Impact on Existing Policies

For individuals who already have a life insurance policy in place before their cancer diagnosis, the impact on their coverage may be minimal. As long as they have been honest about their medical history when taking out the policy, the insurance company should honour the policy as normal. However, they may find it difficult to increase the value of their existing policy and may need to explore other options, such as using a "special event option" to increase coverage.

Importance of Disclosure

It is crucial for individuals to be upfront and honest about their health, including any cancer diagnosis or family history of cancer, when applying for life insurance. Misrepresenting their health or withholding information could result in the insurance company denying their beneficiaries' claims in the future. During the first two years of a policy, there is usually a contestability period when the insurance company can dispute a claim if questionable information is discovered.

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Underwriting policies for cancer patients

Type and Stage of Cancer

The type and stage of cancer are crucial factors in underwriting decisions. Some cancers are considered more aggressive or have higher recurrence rates, which may impact eligibility or result in higher premiums. The stage of cancer indicates how far it has progressed and spread to other parts of the body. More advanced stages, such as stage IV, present a higher risk for insurers.

Treatment History and Response

Underwriters will consider the patient's treatment history, including the types of treatment received and their impact on the cancer. They will also evaluate the success of the treatment and the overall prognosis. Insurers may request information about ongoing treatment plans and the doctor's assessment of the patient's long-term health outlook.

Time Since Diagnosis and Remission

The time elapsed since diagnosis, completion of treatment, and remission is significant. Insurers generally favour applicants who have been in remission for a more extended period, as it demonstrates a lower risk of recurrence. The required remission period varies depending on the insurer and type of cancer but typically ranges from one to five years.

Overall Health and Medical History

In addition to cancer, underwriters will consider the patient's overall health and medical history. Other health issues, such as heart disease, diabetes, or obesity, can increase the patient's risk profile and affect eligibility or premium rates. Pre-existing conditions and family medical history can also impact underwriting decisions.

Age and Lifestyle Factors

Age and lifestyle choices, such as smoking, alcohol consumption, occupation, and risky hobbies, are considered in the underwriting process. Older individuals or those with unhealthy lifestyles may face higher premiums or limited coverage options.

Waiting Periods and Coverage Amounts

Cancer patients may face waiting periods before qualifying for traditional life insurance policies. These waiting periods vary depending on the insurer, type of cancer, and chance for recurrence. During this time, guaranteed issue and simplified issue policies may be available, but they typically have higher premiums and lower coverage amounts.

Medical Examinations and Health Questions

Traditional life insurance policies usually require a medical examination and a detailed review of medical records. Simplified issue policies may not require an exam but may involve answering health questions. Guaranteed issue policies typically have no medical questions or exams but come with higher premiums and lower coverage amounts.

Working with an Independent Agent

Cancer patients should consider working with an experienced independent insurance agent who specialises in impaired risk underwriting. These agents can help navigate the complex process, shop for the best rates, and find insurers more willing to insure cancer survivors.

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Pre-existing conditions and insurance coverage

In the United States, the Affordable Care Act has ensured that health insurance companies cannot refuse coverage or charge higher premiums based on a person's health before the date that the new coverage starts. This means that pre-existing conditions, such as asthma, diabetes, cancer, and pregnancy, cannot be used as a reason to deny coverage or increase rates. Once enrolled, the insurance company cannot refuse to cover treatment for pre-existing conditions or raise rates based on health. This applies to Medicaid and the Children's Health Insurance Program (CHIP) as well.

However, it is important to note that "grandfathered" health plans purchased before March 23, 2010, are not required to cover pre-existing conditions. If you have such a plan and want pre-existing conditions covered, you can switch to a Marketplace plan during Open Enrollment or buy a Marketplace plan outside of Open Enrollment when your current plan year ends.

When it comes to life insurance, a diagnosis of cancer can make it challenging to qualify for a new traditional policy. If you already have life insurance and are diagnosed with cancer, your policy should be honoured 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 existing policy.

If you are seeking life insurance after a cancer diagnosis, you may be eligible for guaranteed issue life insurance or a final expense life insurance policy, which are more expensive and have lower payouts. After several years in remission, you may be able to switch to a traditional policy with lower rates. The specific waiting period depends on the type of cancer and the insurance company.

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Options for reducing life insurance costs post-cancer

If you've been diagnosed with cancer in the past, you may be worried about the cost of life insurance. While it's true that life insurance rates can increase after a serious illness, there are still ways to keep costs down. Here are some options to consider:

Shop around for policies

The first step to finding affordable life insurance is to shop around and compare rates from multiple providers. Different insurers have different rates and underwriting criteria, so it's worth getting quotes from several companies to find the best deal. There are also brokers and comparison websites that can help you find policies suited to your needs.

Consider a guaranteed acceptance policy

If you're struggling to find affordable coverage due to your health history, a guaranteed acceptance policy could be an option. These policies don't require a medical exam or health questions, so you're guaranteed to be accepted regardless of your cancer history. However, these policies tend to be more expensive and have lower coverage amounts, so they may not be the best option for everyone.

Look into a graded death benefit policy

Graded death benefit policies are another option for those with serious pre-existing conditions. With these policies, the full death benefit is only paid out if the insured person dies after a certain number of years (e.g., two or three years). If death occurs within the first few years, only a portion of the benefit is paid out, or the premiums plus interest are returned. While not ideal, this can be a more affordable option for those who can't qualify for standard coverage.

Apply for a policy with a 'waiver of premium' rider

A 'waiver of premium' rider is an add-on to a life insurance policy that waives your future premiums if you become totally disabled due to illness or injury. This can be extremely helpful if you're concerned about being able to afford your premiums in the future due to health issues. However, this rider will increase your premiums, so consider whether the potential benefit justifies the extra cost.

Work on improving your overall health

Improving your overall health can also help lower your life insurance costs. This includes maintaining a healthy weight, getting regular exercise, quitting smoking, and managing any chronic conditions. If you can show that you're taking steps to improve your health, insurers may view you as a lower risk and offer more competitive rates.

Review your policy regularly

Finally, remember to review your life insurance policy regularly, especially if your health status changes. You may be able to qualify for a better rate or find a policy that better suits your needs as time passes and your health improves.

Frequently asked questions

No, life insurance premiums do not increase if you get cancer or any other health condition. Your premiums can only increase if the rates for all customers in your classification go up.

Yes, it is possible to obtain life insurance after cancer. Many insurers will consider your application once you are in remission or deemed cancer-free. However, your options may be limited, and you may have to pay higher premiums due to the increased risk associated with your medical history.

Yes, if you have a valid life insurance policy in force and you die from cancer or any other cause covered by the policy, your beneficiaries will receive the death benefit specified in the policy. It is important to review your policy documents to understand any exclusions or waiting periods that may apply.

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