According to the Centers for Disease Control and Prevention, cancer is the second-leading cause of death behind heart disease.
At the same time, some people can live for decades after receiving a cancer diagnosis. According to the American Cancer Society, about 18 percent of cancer sufferers have survived at least 20 years since being diagnosed.
For many, this raises the question: Can you get life insurance if you have or had cancer? Here, we explore the relationship between life insurance and cancer — before, during, and after diagnosis.
It all comes down to risk. To determine the amount of risk of an insured, life insurance underwriters will examine the individual to determine the probability of an applicant’s life lasting up to or beyond average life expectancy or of an applicant passing away before average life expectancy.
Your health is one of the main factors insurance companies use in the underwriting process. Insurers will not only examine your current health, but also any past ailments. Underwriters will also ask about your family history.
Based on your health and other underwriting factors, the insurance company will assign you a rating. The most common rating is standard, which means the applicant carries an average amount of risk.
If you are young, in optimal health, and/or carry few other risk factors, you may receive a select or preferred rating, which will result in paying less premium than if you qualified as a standard risk.
If you carry above-average risk factors, you may receive what is called a table rating. Table ratings allow an insurer to further assess an applicant in accordance with their risk level and to provide coverage at an increased rate.
Tables ratings are usually letter grades from A to whatever the lowest rating an insurer will consider. For example, an applicant that has a table rate of A will usually pay the standard rate plus an additional percentage.
How your application is underwritten and whether you qualify for coverage with a history of cancer will depend on the following factors.
Having a family history of cancer likely won’t affect your ability to buy life insurance, provided you don’t have many other risk factors.
Your family history may, however, impact what you pay for coverage. Some insurance companies consider the presence of cancer in your immediate family, including your parents and siblings, to be a high-risk factor. The impact will depend on the type of cancers you’ve had in your family and how fatal the disease was.
While the mere presence of cancer in your family history may cause some insurers to charge a higher premium, others dig a little deeper. Cancer in your family may not affect your rates with other carriers if family members survived many years with the disease. Carriers will also evaluate whether your family members had what is considered hereditary types of cancer.
There are also insurers who won’t inquire at all about your family history of cancer.
Unfortunately, getting life insurance with cancer is difficult. The more recent your cancer diagnosis and treatment, the less likely you are to qualify for a traditional, individual life insurance policy. If you are undergoing any cancer treatments at the time of your application, or if your diagnosis was within the previous two to four years, most insurance companies will consider you too risky to insure. Underwriters do not want to assess an applicant whose medical status is likely to change in the first years of the policy.
There are ways you can get life insurance coverage even if you’re recently diagnosed with cancer or still being treated. You will need to buy guaranteed issue life insurance.
A guaranteed issue policy is one in which you can get coverage regardless of your health or other factors. Once you apply and pay the premium, you are guaranteed coverage. Because of the lack of underwriting, this type of policy offers a limited death benefit. The premium will also be higher than other types of insurance. But a guaranteed issue policy can provide enough to cover final expenses.
Another option is to sign up for group life insurance through your employer or an organization you are a member of. An employer-sponsored group life insurance plan covers a number of lives. By spreading its risk among several policyholders, insurance companies can charge less in premium for group life insurance.
Many group life plans are subsidized by the employer or sponsoring organization. This means the individuals who are insured pay less for coverage. In many cases, employers pay the full cost.
Group life insurance is also easier to obtain because it does not require underwriting. With employer-sponsored coverage, your status as an employee automatically qualifies you for coverage, though some plans require you to wait a certain period (such as 90 days) before you qualify.
If your cancer is in remission, you may have more life insurance options than if you are still being treated.
- The type of cancer you had. Certain types of cancer have better survival rates than others. For example, about 24 percent of people diagnosed with thyroid cancer live more than 20 years beyond their diagnosis. On the other hand, only 6 percent of those diagnosed with lung cancer survive more than 20 years, and 60 percent succumb to the disease within five years of diagnosis.
- The date of diagnosis.
- The date of your last treatment.
- Other health factors. Being diagnosed with other diseases besides cancer, such as diabetes or mental illness, will affect whether you qualify for life insurance, even if your cancer is in complete remission. Insurers will also assess your weight, whether you’ve used tobacco and the various results from the blood work that is part of the medical exam.
Most life insurance policies will cover a cancer-related death.
If you have life insurance at the time of your death, you are almost certain to receive a death benefit if the cause of death is cancer.
The only exception is if you lied on our application about your previous experience with cancer or your family history.
Most life insurance policies have a contestability period. If the insurance company finds material misrepresentations on the application during this period, it can deny a claim.
For example, if the insured’s age or health condition was not accurate on the application and the insurance company discovers this during the contestability period, a claim can be denied. Once this period expires, the insurance company has no legal recourse if it finds inaccurate application information. Contestability periods are typically the first two years from the date of issue.
Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.
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