Cancer Life Insurance: Understanding Your Coverage Options

Cancer insurance is a supplemental policy that helps cover treatment costs in the event of a cancer diagnosis. It covers expenses that may not be fully covered by primary health insurance, such as deductibles, copayments, and out-of-pocket costs related to chemotherapy, radiation therapy, and surgery. Cancer patients may also be able to qualify for some life insurance policies, which will pay a death benefit to beneficiaries upon the policyholder's death. This can help cover burial expenses and other end-of-life costs.

Life insurance for cancer patients

A cancer diagnosis can be emotionally and financially challenging for patients and their families. The stress of treatment, managing health expenses, and the possibility of losing a source of income can be overwhelming. This is why life insurance for people with cancer can be beneficial, especially if you are the primary breadwinner for your dependents.

It can be difficult to secure life insurance after a cancer diagnosis, but it is not impossible. Cancer patients are considered higher-risk, so a life insurance policy may be more expensive and have specific requirements. Some insurers, for example, will require you to be in remission for at least five years before offering you a policy. Additionally, insurers may place you in a higher-priced category based on your medical records and family health history.

Types of life insurance for cancer patients

• Guaranteed issue life insurance: This type of policy is typically available regardless of health status, meaning you may still get approved if you have cancer. These policies usually have no medical exam requirement, lower coverage amounts, and higher premiums.
• Simplified issue life insurance: This policy doesn't require a medical exam but includes a few health-related questions in the application. It offers quick approval and generally has a lower death benefit than traditional life insurance policies.
• Final expense insurance: This is a small permanent policy that can help cover end-of-life expenses such as funeral costs and medical bills. It usually doesn't require a medical exam, and you can receive a lower coverage amount.
• Group life insurance: You may be able to access group life insurance through your employer, which can often come in the form of guaranteed issue. This means you likely won't be penalised for your cancer diagnosis.

Using life insurance to pay for cancer treatment

In addition to life insurance, cancer insurance can help cover the expensive costs involved in a patient's cancer journey. Cancer insurance is a supplemental policy that covers various expenses that may not be fully covered by primary health insurance, such as deductibles, copayments, and out-of-pocket costs related to chemotherapy, radiation therapy, and surgery.

If you have a life insurance policy in place before your cancer diagnosis, you may also be able to use that policy to help pay for treatment. For example, if you have built up cash value on your whole life or universal life insurance policy, you may be able to withdraw from the cash value, get a life insurance loan, or surrender your policy in exchange for its cash value minus surrender charges.

Additionally, you can use a life insurance rider, an optional add-on to your policy, to supplement your coverage. A rider can allow you to collect part of your death benefit while you're still alive. For example, an accelerated death benefit (ADB) rider, also called a terminal illness rider, lets you receive a portion of the death benefit while still alive if you're diagnosed with a qualifying terminal illness.

Cancer insurance

When considering cancer insurance, it is essential to review the policy carefully to understand what it covers and what it doesn't. Important factors to consider include:

• The extent of coverage (outpatient care, hospital care, cancer treatment, cancer screening, home care, rehabilitation, etc.)
• Whether the primary health insurance covers similar costs
• If benefits can be received from both plans
• Whether the employer offers cancer insurance or if it needs to be purchased directly
• How benefits are paid and if there is a fixed payment amount for each type of care
• When benefits can be collected and how long they will be paid
• Whether the state has specific laws regarding cancer insurance

Additionally, some life insurance policies and riders can provide financial protection in the event of a cancer diagnosis. Life insurance companies may consider an individual's cancer history, family medical history, age, cancer type, stage, and treatment when determining eligibility and premiums.

Getting life insurance after a cancer diagnosis

If you've been diagnosed with cancer, you may be wondering what it might be like to obtain life insurance after your diagnosis. The good news is that plenty of life insurance companies insure cancer patients and survivors. However, it can be difficult to lock in life insurance after a cancer diagnosis, and you may have to pay higher premiums.

How life insurance companies evaluate your eligibility

When evaluating your eligibility for traditional policies, insurance companies consider the following:

• Date of diagnosis: The more recent your cancer diagnosis, the fewer policy types are available to you, and the more expensive the rates. Insurers may have a cut-off point for qualifying for traditional life insurance again, often after you've been in remission for five years.
• Cancer type: Cancers with a higher survival rate or a lower chance of returning once you're in remission 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'll need to detail your overall health as well as the types of treatment you've received and their impact on your cancer.
• Lifestyle: Riskier lifestyles lead to higher rates, so avoiding dangerous hobbies like skydiving can keep your premium from increasing.
• Family history: If your family has a history of cancer, you may pay a higher premium than a person with no history of cancer in their family.
• Relapses: If you've suffered any relapses, it may impact your ability to get traditional coverage.

Types of life insurance for cancer patients

• Guaranteed issue life insurance: This type of policy is typically available to individuals regardless of their health status, meaning you may still get approved if you have cancer. These policies usually have no medical exam, lower coverage amounts, and higher premiums.
• Simplified issue life insurance: This type of policy doesn't require a medical exam, but includes a few health-related questions in the application. It offers quick approval and generally has a lower death benefit than traditional life insurance policies.
• Final expense insurance: This is a small permanent policy that can help cover end-of-life expenses such as funeral costs and medical bills. You typically won't need to take a medical exam, and you can receive a lower coverage amount.

At some companies, you can take out life insurance if you have cancer, but others may deny coverage. It's important to know that you have options if you have battled cancer before or have a new diagnosis. In addition to life insurance, cancer insurance can also help cover the expensive costs involved in a patient's cancer diagnosis journey.

Life insurance for cancer survivors

If you're a cancer survivor, you may be wondering about your options for life insurance. The good news is that there are indeed options available to you. The not-so-good news is that it may be more difficult to obtain life insurance, and you may have to pay higher premiums.

When considering life insurance for cancer survivors, insurance companies will take into account various factors, including the type and stage of cancer, your treatment, overall health, and family history. They will also refer to the National Cancer Institute's SEER database, which provides information on the survival rates of different types of cancer.

Based on these factors, insurance companies will place you into a risk category, which will determine the premium you pay. The higher the risk, the higher the premium. Cancer survivors are often considered higher risk and, therefore, may face higher premiums.

Types of life insurance for cancer survivors

There are a few different types of life insurance policies that cancer survivors can consider:

• Guaranteed issue life insurance: This type of policy is available regardless of health status, and there is usually no medical exam required. However, these policies tend to have lower coverage amounts and higher premiums.
• Simplified issue life insurance: This policy doesn't require a medical exam, but there are a few health-related questions on the application. It offers quick approval and a lower death benefit than traditional policies.
• Final expense insurance: This is a small permanent policy that can help cover end-of-life expenses such as funeral costs and medical bills. It usually doesn't require a medical exam and provides a lower coverage amount.
• Group life insurance: In some cases, cancer survivors may be able to access group life insurance through their employer, which can often come in the form of guaranteed issue without penalties for a cancer diagnosis.

Using life insurance to pay for cancer treatment

In some cases, you may be able to use your life insurance policy to help cover the costs of cancer treatment. If you have a whole life or universal life insurance policy, you may be able to access the cash value of the policy to pay for medical expenses or replace lost income. You can do this by withdrawing from the cash value, taking out a life insurance loan, or surrendering your policy in exchange for its cash value.

Additionally, you may be able to add a rider to your policy, which is an optional add-on that supplements your plan. A rider can allow you to collect a portion of your death benefit while you're still alive, which can be useful for covering treatment costs.

Tips for getting life insurance as a cancer survivor

When applying for life insurance as a cancer survivor, it's important to be honest about your health and disclose your cancer diagnosis. Here are a few other things to keep in mind:

• Shop around and compare policies from different insurance companies, as the terms and rates may vary.
• Consider the type of cancer you've had and its survival rate. Cancers with higher survival rates may improve your chances of getting a better policy.
• If you've been in remission for a few years, your risk level may decrease, and you may be able to qualify for lower premiums.
• If you're young and otherwise healthy, you may have a better chance of getting a preferred rate.
• Consider guaranteed issue policies, but be aware that the premiums can be surprisingly high.
• Traditional term or whole life policies may be difficult to qualify for, but they typically offer lower premiums, so consider applying for these once you've been in remission for a while.

Life insurance riders

There are two main types of life insurance riders that are relevant to cancer patients:

• Accelerated Death Benefit (ADB) Rider: Also known as a terminal illness rider, this allows you to receive a portion of your death benefit while you are still alive if you are diagnosed with a qualifying terminal illness. There may be a cap on the amount you can access, and the funds you use will be deducted from the final death benefit when you pass away.
• Chronic or Critical Illness Rider: This is a specific type of ADB rider that allows you to access your death benefit if you meet certain requirements related to chronic or critical illnesses, as defined in your policy. Like the ADB rider, the funds you use will be deducted from the final death benefit.

If you already have a life insurance policy, it is worth checking with your insurance company to see if you have any riders that can be activated or added upon a cancer diagnosis. These riders can help cover expenses during your illness and provide financial support for medical costs and living expenses.

Frequently asked questions