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Upon receiving a life-altering cancer diagnosis, you face an overwhelming flurry of thoughts and fears. One that may eventually arise is whether you'll still be able to qualify for life insurance.
It's ideal to get life insurance when you're younger and healthy, before a cancer diagnosis, since traditional plans typically stay in place and continue coverage. Most life insurance companies deny coverage for new policies to cancer patients in treatment, though there are some alternative options. After a few years of remission, you could qualify for a traditional policy again.
Your ability to get life insurance after a cancer diagnosis depends on various factors, including your prognosis, treatment and time since diagnosis or remission.
How Does Cancer Affect Your Life Insurance Eligibility?
If you obtained life insurance before your diagnosis, and you pass away from cancer, you'll likely remain covered and your loved ones will receive your death benefit.
However, it's trickier when applying for life insurance after a cancer diagnosis. While everyone's guaranteed to die one day, life insurance is based on risk calculations, so your health and life expectancy help determine if you're eligible. It can seem callous, but insurers are less likely to approve those who have had serious health issues or diagnoses resulting in shorter life expectancies.
How cancer impacts eligibility varies across insurance companies. Some may approve those in remission for at least five years, albeit at higher rates, while others may deny outright. You may find it easier to get approved or nab lower rates if you had early-stage cancer, a very treatable cancer and no prior history of the disease.
Life insurance companies want a solid picture of your health and life expectancy to determine if you're eligible and what premium you'll pay. For traditional policies, expect to be asked about:
- Your family's cancer history: It can indicate increased risk for you.
- Type of cancer and stage: Those cancers with higher survival rates and lower recurrence rates make you less risky to insurers.
- Treatments received: For example, chemotherapy, radiation or surgery.
- Last treatment: This includes how long ago you received treatment and how your health has been impacted.
- Time since remission: Some insurers require a minimum wait period before they'll sell you a policy.
- Lifestyle habit: Things like alcohol or tobacco use can increase your risk for other health complications.
- Other health issues: For example, diabetes or high blood pressure.
If you already have traditional life insurance, you shouldn't lose coverage with a cancer diagnosis. Exceptions are if you failed to pay your premiums or if you were untruthful when applying, since providing false information is considered fraud and can result in no payout of death benefits.
What Types of Life Insurance Are Available for Those Living With Cancer?
Once you've been in remission for several years, you may become eligible for traditional life insurance again. Unfortunately, if you're currently living with cancer, undergoing treatment, facing a terminal diagnosis or newly in remission, it's unlikely you'll qualify for traditional policies, but you have other options:
Simplified Issue or Guaranteed Issue Life Insurance
Those ineligible for traditional life insurance can instead buy simplified issue or guaranteed issue life insurance, also called no-exam life insurance.
Unlike traditional insurance, which requires a detailed medical history and sometimes medical exams, these won't deny you because of pre-existing conditions like cancer.
Simplified issue is for those with good or fair health, and doesn't require exams; you only have to answer a few medical questions. There's a minimal waiting period, providing coverage in days rather than weeks or months like with traditional policies.
Guaranteed issue, geared toward those who are older or with health problems, generally requires no medical information and guarantees payout.
The trade-off for easy approval: Premiums are higher and the death benefit may be lower due to increased risk.
Additionally, these plans sometimes have a graded benefit period. That means should you die within a short time of purchasing the policy, usually two or three years, your family won't receive the full death benefit (though they'll usually receive at least the premiums with interest).
You can apply for these policies through many major insurance companies. If you're unsure where to start, consider viewing online comparison sites, contacting an insurance broker or looking at your state's insurance department's list of providers.
Group Life Insurance
Some employers offer optional life insurance, either at no cost or a reduced cost, as an employee benefit. Just like health insurance, life insurance is cheaper and easier to qualify for if obtained through your employer rather than on your own since it's typically guaranteed coverage.
If you're working and covered by a group life insurance policy and you develop cancer, you won't be penalized and lose your policy. Just know that this type of group insurance, like workplace health insurance, only exists while you're employed. Additionally, there may be coverage limits tied to your salary.
If you're working and unsure of your coverage, ask your human resources department about life insurance benefits.
Life Insurance Riders
If you already have a life insurance policy but it doesn't cover cancer, you may be able to add on or activate riders for additional benefits. Two specific types allow cancer patients to use some or all of their death benefit while still alive to help with expenses.
One is an accelerated death benefit rider, or terminal illness rider. This allows those diagnosed with certain terminal illnesses to receive some of their death benefit while alive. Some insurers also offer chronic or critical illness riders, which work similarly.
Contact your life insurance company to inquire if your policy comes with any life insurance riders you can activate or add upon a cancer diagnosis.
Cancer Insurance
Some insurance companies also offer a niche product called cancer insurance, providing cash benefits for medical bills and other expenses if you get cancer. However, these usually must be purchased before getting cancer or after many years of remission, so it's possible you'll spend money on premiums and never need it. But if your family has a strong history of cancer or you fear future recurrence, it could be beneficial to have it in your arsenal and protect your future finances.
Finding Life Insurance While in Remission
If you could only qualify for guaranteed issue life insurance while fighting cancer, but you enter remission, it's possible you could later switch your policy to a traditional one. Or, if you didn't have life insurance, you could potentially qualify for new traditional life insurance after a few years of remission.
Traditional life insurance comes in two basic types: term and whole life (also called permanent). Term life insurance is less expensive and bought for a set period, such as five, 10 or 20 years, after which it expires. You might be able to renew it, though premiums could increase (and it's possible renewal is denied if your health worsens). Some term policies can be converted into whole life policies.
Whole life insurance lasts until you die. The premiums are typically higher than term policies, but coverage is usually for life and the policy builds cash value you can access.
Depending on the insurer, cancer survivors could qualify for one or both types of policies after a certain period of remission. It's common for there to be a waiting period from your last cancer treatment for coverage or paying your death benefit.
Timing requirements can vary by the company rules and cancer type; some insurers require 10 years of remission, while others may permit as few as two years. Some cancers, like skin or prostate cancers, might have shorter waiting periods.
If you're less than five years out from remission, some traditional life insurance policies could approve you rather than outright rejecting you. Just prepare for much higher premiums.
Since restrictions and costs for cancer survivors vary greatly by insurer, it's worth shopping around to obtain multiple quotes.
The Bottom Line
If you're diagnosed with cancer, know that there are options for getting life insurance. Just know that, as long as you're still in treatment or newly in remission, options are limited and costlier.
The best way to ensure coverage is to have a term or whole life insurance policy already in place before you get sick. That way, if you get cancer and it becomes terminal, you'll know your existing policy will be there to help your loved ones.