Life Insurance for Cancer Patients & Survivors
Purchasing life insurance after a cancer diagnosis is complicated and expensive, but you should be able to do so. However, you must consider whether the cost and available coverage are appropriate for your financial situation. For the first few years, cancer patients are typically only eligible for guaranteed issue policies with limited coverage and payouts.
Cancer survivors who have been in remission for two to five years are more likely to qualify for a traditional term or permanent life insurance policy. However, rates will be higher, and some cancers will not be accepted for coverage.
Does life insurance cover cancer?
Cancer is covered by term and permanent life insurance policies. Your beneficiaries will receive the death benefit if you die as a result of cancer during the coverage period. The only policies that do not cover cancer are accidental death and dismemberment policies, which pay out only if you are injured or die as a result of an accident.
It's critical to be honest with your insurer when purchasing cancer life insurance, whether you're a survivor or in treatment. Though life insurance does cover cancer, your beneficiary's claim may be denied if the insurer can prove that you intentionally misrepresented your health or were fraudulent in your application.
There is usually a contestability period during the first two years of a policy. This means that if the information you provided was questionable, the insurer may contest the claim. Giving a complete and honest history will help ensure that your beneficiaries receive the funds you intended for them.
Life insurance for cancer survivors
Cancer survivors pay more for life insurance, but if you're in remission and otherwise healthy, you can often get coverage. Certain types of cancer may cause you to be denied coverage, but if you've been in remission for several years, you should be able to purchase term or permanent life insurance. If you are unable to demonstrate that your cancer is in remission, or if you have another condition, such as diabetes, you may receive very high quotes or be unable to purchase a policy at all.
Buying life insurance after cancer
Along with being healthy, the length of time post-cancer is an important qualifier for purchasing life insurance. Depending on the insurer and the type and stage of cancer, you could have to wait two to five years after your last treatment to be approved for life insurance. If your cancer is in remission but you have more than one surveillance appointment per year, you may be considered an active treatment patient.
When you apply for life insurance after being diagnosed with cancer, the insurer will ask you a series of questions about your diagnosis and treatment, such as:
- When you were diagnosed
- If you have any family history of cancer
- The type and stage of cancer you had and whether it metastasized
- The treatments you underwent, when they began and your last treatment date
- Whether you're in remission and, if so, for how long
- Where your cancer was located, its size and whether your lymph nodes were affected
- If you've had any relapses
- Any medications you're currently taking
Ex-cancer patients will have a much easier time purchasing life insurance if they can provide detailed answers to all of these questions, backed up by medical records. You may also be required to show that you are strictly adhering to any prescribed treatment plan, including medications and follow-up appointments.
How your type of cancer impacts life insurance
The type of cancer and how it progressed determine whether a cancer survivor is approved for life insurance. Cancers that have metastasized, or spread to different parts of the body, are considered more dangerous and may result in rejection. You'd be considered a lower risk if the cancer was in-situ or localized.
Nonmelanoma skin cancer is the only type of cancer that is considered low-risk enough to qualify for a preferred life insurance rate. You would need to be in excellent health and have had no problems following treatment for several years.
Survivors of breast cancer, prostate cancer, testicular cancer, and thyroid cancer are considered moderate-risk, but they frequently qualify for standard rates. Insurers will inquire about your diagnosis, treatment, and overall health, and the longer you've been in remission, the more likely you'll be approved.
If you've had another type of cancer, such as melanoma or cervical cancer, and been in remission for several years, you may be able to get a life insurance policy, but at nonstandard, or higher, rates. Some cancers, such as leukemia, pancreatic cancer, and colon cancer, are generally deemed too dangerous to cover. Survivors of one of these conditions are rarely approved for coverage.
Life insurance for cancer patients
You can get life insurance if you have cancer, but your options are severely limited. Most term and whole life insurance policies are not available to cancer patients, and if you apply for coverage, you will be denied. Instead, you should either buy a limited-term guaranteed whole life insurance policy or group life insurance, which can be a guaranteed issue.
While both options are available to terminally ill cancer patients, we recommend that only guaranteed issue life insurance policies with no waiting period, such as group life insurance, be pursued. During the first two to three years of coverage, policies with a waiting period will not pay the death benefit to your beneficiaries. Your premiums may be wasted if you do not expect to live that long. Unfortunately, no-waiting-period guaranteed issue life insurance policies are not available to everyone. If you are unable to obtain coverage through your employer or an association, you may be unable to purchase a policy.
If you want to add coverage to an existing life insurance policy, you may be able to do so through your insurer, depending on your existing policy and the coverage you want to add. For example, if you currently have a term life insurance policy and are satisfied with the amount of coverage, but want a longer period of coverage, this is likely possible.
Most term life insurance policies can be converted to permanent policies with lifetime coverage, and you won't have to go through underwriting. Increasing the death benefit on your existing term policy, on the other hand, would necessitate additional underwriting, which might not be approved. We recommend reviewing the terms of your current policy, paying special attention to conversion options and riders that were either added or could be added that would increase your coverage without requiring a medical exam.
Guaranteed whole life insurance
Guaranteed life insurance, also known as burial insurance, can be purchased regardless of whether you have been diagnosed with cancer or are currently undergoing treatment. Because this is a type of whole life insurance, your coverage will last your entire life. Burial life insurance policies are primarily designed for seniors, and most are not available to those under the age of 45. You will not be disqualified because of cancer or other medical issues. They are, however, more expensive than term or other permanent life insurance policies and have several important limitations:
- Limited death benefit: Unlike life insurance policies with medical underwriting or health qualifiers, guaranteed issue life insurance policies usually have a maximum death benefit between $25,000 and $50,000. If your goal was to have life insurance pay for your children's college tuition if you died, a burial insurance policy would not suffice. However, the death benefit may be sufficient to cover funeral expenses or other end-of-life expenses.
- Waiting period: Because guaranteed life insurance policies have a two to three-year waiting period, they are unsuitable for terminal cancer patients. Your family would only receive the full death benefit if you died in an accident during the waiting period. If you died of cancer, they would only receive a refund of your premiums plus interest.
Despite these limitations, guaranteed life insurance is likely to be the best option for cancer patients, and if you need a policy, we recommend comparing quotes and coverage options from multiple insurers. Compare these options to group life insurance and the amount you could leave your family simply by saving. Life insurance quotes for cancer patients are typically expensive, so you might be better off saving and investing the money you would otherwise spend on premiums.
Group life insurance
Group life insurance may be available if you are a veteran or a member of certain organizations, but it is most commonly provided by employers. If your workplace or your spouse's workplace offers group life insurance policies, you may be able to purchase coverage with cancer, as these are often guaranteed issues up to a certain amount of coverage. Higher levels of coverage, on the other hand, will require medical underwriting, so read the plan's terms carefully.
Group life insurance quotes are higher than standard term life insurance quotes. Because premiums are primarily determined by your age rather than your health, cancer would not raise your rates with guaranteed issue coverage. If you were to leave your job later, such policies are usually convertible to permanent life insurance, so you would not have to give up your coverage.
Life insurance with a family history of cancer
Having a family history of cancer raises your chances, but the amount depends on your family's medical history. Typically, insurers want to know:
- The kind of cancer.
- The number of relatives who have been diagnosed, as well as how you are related.
- The age of your relative when they were diagnosed. If they were a senior, their impact on your rates would be less than if they were young.
Paying for cancer treatment and costs with life insurance
Cancer patients who already have life insurance may be able to use it while they are still alive to pay for medical expenses or supplement their family's income. It depends on the type of policy, your health, and whether you added riders when you purchased your policy.
With a cash value life insurance policy, such as a whole life or universal life insurance policy, you can access its cash value through a policy loan or surrender. Surrendering your life insurance policy is the same as canceling it—you will no longer have coverage and will no longer be required to pay premiums. In exchange, you will receive the policy's cash value less any surrender fees.
Cancer patients can also obtain a life insurance policy loan, borrowing up to the cash value of the policy. There is no credit check, no repayment schedule, and very low interest rates because the insurer holds the cash value as collateral. The only disadvantage is that if your cash value reaches zero, your policy may lapse, and the death benefit received by your beneficiaries will be reduced by the outstanding loan amount if you die.
If you are terminally ill or in poor health, you may want to consider selling your life insurance policy. When you die, the buyer takes over paying your premiums in exchange for receiving the death benefit from your policy. Most life insurance settlements are for permanent life insurance policies, but you might be able to sell a term life insurance policy if you can show that you're going to die soon.
Because the buyer pays the difference between your policy's cash value and death benefit, life insurance settlements pay out more money while you're still alive than policy loans or surrenders. However, the amount of money you receive in excess of the cash value of the policy is determined by your health. For example, if you have terminal cancer and your doctor predicts that you will die within the next year, you will receive a higher price because the buyer is likely to pay premiums for a limited time.
If your life insurance policy includes "living benefits" riders or policy add-ons, you may be able to use them to pay medical costs while you're living. Every policy has its own set of riders, so check your policy's specifics, but an accelerated death benefit rider is one of the most common. These allow you to access the death benefit if you are terminally ill or, in some cases, chronically ill. However, the terms vary by insurer, so check to see if your cancer's progression qualifies you to use any of your riders.