A cancer diagnosis is a challenging time for any family. Even having a family history of cancer can put you in a perpetual state of anxiety about an upcoming diagnosis.
Eligibility for life insurance is one of the main concerns for people living with cancer, cancer survivors, and people with a family history of cancer. However, insurance providers do sell life insurance for people with cancer. The type of policy for which you can qualify varies, depending on your cancer diagnosis.
In this blog, our team from Alliance Income Services Corp. (AIS) will cover some important facts you need to know about getting life insurance while living with cancer.
In this article
- Why Insurance Providers Pay Special Attention to Cancer
- Factors Insurance Companies Watch for When Selling Policies to People With Cancer
- How Different Types of Cancer Can Influence Life Insurance Policies
- The Types of Life Insurance You Can Get With Cancer
- Buying Life Insurance as a Cancer Survivor
- How to Choose the Best Life Insurance Policy When Living With Cancer
- Dealing With Cancer Diagnosis After Buying Life Insurance
- Cancer Life Insurance Vs. Cancer Insurance: What’s the Difference?
- Who Benefits From My Life Insurance Policy When I Die?
- Can I Cash In on My Life Insurance Policy To Treat Cancer?
- How Long Will It Take to Secure Approval for Life Insurance If I Have Cancer?
- What Happens If I Get Turned Down for a Life Insurance Policy?
- Do I Need Professional Help To Find Life Insurance If I Live With Cancer?
Why Insurance Providers Pay Special Attention to Cancer
According to the Canadian Cancer Society, cancer is responsible for around 30% of all deaths in the country. More than 233,000 people will be diagnosed with cancer in 2022, and over 85,000 cancer-related deaths will occur by the end of the year.
With such statistics, it’s economically self-preserving for insurance companies to try and avoid selling policies in situations with high mortality risk.
The probabilities increase even more significantly with certain types of cancer. Lung, colorectal, prostate, and breast cancer are the most common diagnoses. However, lung cancer is the leading cause of cancer death, responsible for almost 25% of all cancer deaths.
Therefore, insurance companies don’t just watch for cancer diagnoses. They also pay attention to the type of cancer and its overall progression.
Factors Insurance Companies Watch for When Selling Policies to People With Cancer
When you apply for a policy as someone living with cancer, the first thing the insurance provider seeks to learn is the length of time since your last cancer treatment.
The exact time you’ll have to wait after treatment before qualifying for insurance will vary from one insurance provider to the other. Each provider will evaluate the type of cancer and the stage of the disease. If the cancer is no longer spreading, but you’re still going in for follow-up appointments at least once a year, some insurance providers may still consider you a cancer patient.
In most cases, you must wait two to five years from the last treatment before applying for life insurance. Some of the questions an insurance company will ask before selling you a policy include the following:
- When were you diagnosed?
- What type(s) of treatment did you receive?
- When did your treatment begin, and when did it end?
- What type of cancer do you have, and what is the metastasis situation?
- How wide is the spread?
- Are you in remission, and for how long?
- Do you have a family history of cancer?
- What medications are you taking currently?
- Have you experienced a relapse?
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How Different Types of Cancer Can Influence Life Insurance Policies
Given that more than a hundred different types of cancer exist, insurance companies must weigh the level of risk tied to a policy applicant by evaluating the type of cancer the patient has and the stage of the disease. Below, we look at some of the different cancer situations and how life insurance companies view them.
Metastasized Cancer
Metastasized cancer has spread from its source to at least one other area of the body. Insurance companies regard metastatic patients as high-risk. Some insurance providers may reject the applications because the applicants have a higher probability of complications arising and a high risk of early death.
If the insurance provider approves you for life insurance with metastasized cancer, you should expect to pay higher premiums than individuals on standard life insurance policies.
Early-Stage Cancer
Life insurance companies rate patients with early-stage or localized cancer in one body organ as medium risk. If you are in this situation, you should still expect to pay higher premiums than people living without cancer.
The cancer hasn’t spread to other parts of the body, but there is always a risk that it will. Therefore, insurance companies will hedge their bets by categorizing your profile as a risk.
Cancer With a Low to Moderate Risk of Mortality
The type of cancer you have will influence your insurance provider’s evaluation of your application. For example, patients with non-melanoma skin cancers who don’t have any other underlying conditions may qualify for traditional life insurance rates. The insurance providers classify them as low risk because their five-year relative survival rate is almost 100%.
Similarly, insurance companies rate people living with thyroid, testicular, breast, and prostate cancer as moderate risk—especially if they have been in remission for a few years.
Cancer With a High Risk of Mortality
Insurance companies rate patients recovering from cervical cancer or melanoma as high risk. However, these applicants might be eligible for high-premium policies after some years in remission.
On the other hand, patients living with other forms of cancer, such as pancreatic cancer, colon cancer, and leukemia, may not be eligible for life insurance coverage even after a few years in remission. Patients suffering from these conditions often need to explore other types of insurance, such as high-risk insurance.
The Types of Life Insurance You Can Get With Cancer
Your cancer diagnosis and progression will determine the type of life insurance you can get. However, cancer almost always excludes you from standard whole-life and term life insurance policies.
The exception is when the type of cancer you’re living with has a low mortality rate and you have been in remission for five years or more. With this in mind, the types of insurance you might get with cancer include the following:
Traditional Life Insurance
Traditional life insurance is an option if your cancer case does not qualify you as moderate or high risk. You will fill out a detailed questionnaire in which you’re legally required to divulge all information related to your cancer. Thus, this option is not practical for most cancer patients.
Term Life Insurance
Term life insurance provides coverage for up to 30 years. The insurance company will request a medical examination before setting up a term life insurance policy.
Patients with low or moderate-risk cancer may qualify for term life insurance if they have been in remission for five years or more. However, the premium will be higher than rates for people with a clean bill of health.
No-Medical Life Insurance
Also known as simplified issue life insurance, no-medical is a good policy for people with cancer.
The insurance provider will only ask a question or two about the cancer but will not request a medical examination. Barring any physical signs of advanced cancer, most providers will have no problems offering the policy.
Guaranteed Life Insurance
This type of insurance will not ask any questions about cancer. However, there is a two-year wait period before most policies kick in. It also offers far lower coverage rates than conventional life insurance policies.
A guaranteed life insurance policy is a good option if you have cancer and a prognosis that enables you to live for at least two years.
However, if your situation deteriorates faster than the original prognosis and you face death within two years, the policy will not pay out on the claim. The insurance provider will often return the premiums you already paid to your named beneficiary.
Group Life Insurance
Group life insurance will give you coverage through your employer. However, the coverage will not be as comprehensive as traditional life insurance. Also, you may lose the benefits if you change jobs. According to Groupenroll.ca, “The good news is that converting group life insurance to individual coverage is possible. Unlike other group benefits you would lose if you retire or change jobs, group life insurance comes with conversion privileges that let you stay protected even if you leave your job.”
Buying Life Insurance as a Cancer Survivor
If your days living with cancer are well behind you, finding the right insurance policy might be less complicated.
More Than Ten Years in Stable Condition
Some insurance providers will offer you traditional life insurance if you were diagnosed with cancer over ten years ago but are now very stable.
Five to Ten Years in Stable Condition
Insurance providers may not offer you traditional life insurance policies at this stage, but you will get higher coverage limits with no wait times before the policy can kick in.
Two to Five Years in Stable Condition
You might qualify for a rated simplified life insurance policy if you’re at this stage. If you choose this option, the insurance company will not subject you to a medical exam before signing off on your policy. However, these policies have higher rates and less coverage than traditional life insurance policies.
How to Choose the Best Life Insurance Policy When Living With Cancer
Selecting the right insurance policy while living with cancer can be challenging. However, with the right guidance, you can find a policy that will tick all the right boxes for you. Here are some tips to keep in mind:
Choose the Right Policy Type
Are you purchasing life insurance to give your family a soft landing after your passing?
A term life insurance policy is perhaps the best option to go with. They have the lowest premiums because they are only in effect for 10-30 years. They also don’t have any cash value.
A good advantage of term life insurance is that you can convert yours to whole life insurance without any extra review. Worsening cancer won’t hinder you from converting the policy. However, finding term life insurance for someone with a cancer diagnosis less than ten years old is often difficult.
If you can’t find an insurance company willing to offer term life insurance, you can purchase a whole life insurance policy. The policy will remain in effect for as long as you live, providing a payout to your loved ones if you pass on.
Whole life insurance policies are costly for people living with cancer. However, you can lower the premium by reducing coverage to a sum that covers the basics instead of going for the maximum coverage. Choosing lower coverage can make the policy cheaper and easier to manage.
Choose a Favorable Level of Underwriting
When looking for a life insurance policy for a cancer patient, you can choose either a fully underwritten policy or one with a “no medical exam” condition.
If you choose a fully underwritten policy, you must undergo a thorough medical examination before the insurance provider can decide on your policy. As someone living with cancer, this exam may reduce your already slim chances of getting a favourable policy even further.
The “no medical exam” policy is a better choice here because the insurer will take your cancer information at face value. However, the policy will have lower coverage and higher monthly premiums.
Keep in mind that choosing a “no medical exam” policy doesn’t give you the freedom to misrepresent any information about your health on your application. You must truthfully provide all required information during the application, as any omissions can void the policy.
Choose the Right Amount of Coverage
Your life insurance policy is only valuable if you purchase the right coverage. The right amount of coverage will vary from one person to another. When working out the amount of coverage you need, you should include the following in your calculations:
- Your salary
- Your financial obligations
- Your debt status
- Your savings
- The ages of your spouse and children
If you have tens of thousands in savings, a fully paid mortgage, and children already well into their adult years, you may not need to take the full coverage on offer for your target policy. Reducing the coverage lowers your insurance premium. A great way to explore both your desired payout amount in conjunction with your personal finances, is to use an online life insurance quoter that has a self assessment tool built into it. Insurdinary’s web application allows you to do just that from the comfort of your device. Discover the transparency and accuracy of their product using the link below.
Online Life Insurance Quotes Made Easy, Even If You Have Cancer!
Get a free online life insurance quote, today.
Dealing With Cancer Diagnosis After Buying Life Insurance
Once you sign the dotted lines on your insurance policy, it remains binding—as long as you are completely honest in your application. If you’re diagnosed with cancer years down the line after buying life insurance, your policy will not change in any way, as long as the policy remains valid.
Some scenarios that may affect the validity of your policy include the following:
Your Term Life Insurance Policy Is Up
Term life insurance policies only last two to three decades. If you develop cancer just before your existing policy is up and you intend to buy another term life insurance policy, the insurance provider will subject you to the underwriting process afresh.
It doesn’t matter if you buy the policy from your current insurance provider or a new one. During the new application, you may either end up paying higher premiums Or you may also have your application rejected.
You Have a Group Life Insurance Policy Through Your Employer
If you have a group life insurance policy purchased through your employer, you’ll have the opportunity to port the coverage to a new provider when you change jobs. You don’t have to go through medical checks to change your policy, but switching your group life insurance is more expensive than purchasing your own policy directly.
You Want To Increase the Limits on Your Policy
If you want to increase your coverage or any other such limits on your policy, you must go through additional underwriting. The new cancer diagnosis will lead to an increase in your premiums.
Cancer Life Insurance Vs. Cancer Insurance: What’s the Difference?
It’s easy to confuse cancer life insurance and cancer insurance. However, each policy is different.
Cancer life insurance is a cancer-specific product designed for cancer survivors or people living with cancer. It specifically covers only cancer deaths, and it has higher premiums compared to conventional life insurance. Providers who don’t offer cancer life insurance can still sell other term or whole-life insurance products—with the premiums reflecting the underwriting.
On the other hand, cancer insurance is a type of critical illness insurance. It pays a lump sum if the policyholder is diagnosed with cancer.
The tax-free lump sum can go toward any expenses that will help soften the impact of the diagnosis. Some people use it to pay for a caregiver, and others use it to support medical bills. Critical illness insurance can also be utilized to ensure that household bills and needs are taken care of. This way, folks can simply focus on recuperating, rather than having to worry about funds.
Who Benefits From My Life Insurance Policy When I Die?
There are two main types of life insurance beneficiaries who can receive the payout on a life insurance policy: the primary and contingent beneficiaries.
The primary beneficiary is your family member or friend that you believe should receive the payout after your death. The contingent beneficiary is a backup you name to receive death benefits if the primary beneficiary dies before you do.
Keep in mind that you can choose to name multiple beneficiaries rather than just one person. However, if you choose multiple beneficiaries, you must decide the payout percentage split. You have three main options available:
- Pay a specific pre-determined percentage to each named beneficiary
- Split the death benefit evenly between members of your nuclear and extended families
- Split the payment evenly between all named beneficiaries—not just family members
The death benefit will automatically transfer to your estate if you don’t name a beneficiary. In this situation, the money will go into estate probate. At this stage, the payout will become a part of legal proceedings to divide your estate among your living relatives—after settling any outstanding debts you may have.
Most people name beneficiaries to save their families from the strain of combining legal tussles and mourning the loss of a loved one.
Can I Cash In on My Life Insurance Policy To Treat Cancer?
If you already have an insurance policy before becoming a cancer patient, you may be able to take advantage of it while you’re still alive to supplement your family’s income or take care of your medical bills.
It all comes down to your type of policy, the cancer prognosis, and other special conditions added to your policy at the time of purchase.
You can access the cash value of a whole life insurance policy by surrendering it or taking out a loan. Surrendering the insurance is no different from cancelling it. The policy will no longer cover you and won’t pay out when you die.
Conversely, you won’t need to continue paying any premiums. Before choosing to surrender your insurance policy, be sure to confirm the implications. What are the surrender fees? Are there any costly penalties to pay?
Some insurance providers may also allow you to cash in on your life insurance policy by reaching a settlement with a buyer. The buyer will give you the policy’s cash value and take up the premium payments in exchange for receiving the death benefit when you die. The cash value you will get on this transaction depends on the type of policy and the prognosis for your condition.
A patient with terminal cancer and a 12-month estimated lifespan will get more cash value from their settlement than one with a good prognosis expected to go into remission after a few years of treatment.
If you’re looking to cash in on your existing insurance policy, speak to your provider to explore all your options.
How Long Will It Take to Secure Approval for Life Insurance If I Have Cancer?
The time it will take to secure approval for life insurance as a cancer patient depends on your policy choice. If you choose a “no medical exam” policy, you can expect approval within 48 hours. Policies requiring medical examination may take two to eight weeks or more to process.
However, it’s important to avoid choosing a policy because of the approval timelines. Choose policies that make sense for your situation, and be prepared to wait if necessary.
What Happens If I Get Turned Down for a Life Insurance Policy?
If an insurance provider turns you down because you have cancer, don’t fret. You can explore your options with other providers. In most cases, you only need to request quotes from a few more providers to land a policy.
If, after your best efforts, you can’t get a favorable policy, you should wait until you’re in remission and try again.
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Do I Need Professional Help To Find Life Insurance If I Live With Cancer?
It’s possible to find a life insurance policy on your own. With some research and patience, you can accumulate offers from multiple providers, weigh the options, and choose a product. However, unless you have significant experience evaluating insurance products, you always face the risk of making the wrong choice—which can cost you a lot of money.
Insurance providers often have different rules and conditions, even when comparing similar products. You need the experience to comb through the fine print and ensure that you’re not missing out on any details that will hurt you later.
An insurance policy is an important financial instrument, and you must treat it as such. Talk to your financial advisor or seek the services of qualified insurance advisors.
Find the Right Life Insurance Policy for You
A cancer diagnosis can significantly alter your life, but it doesn’t prevent you from getting life insurance for people with cancer. You may qualify for whole or term life insurance depending on the type of cancer, treatment options, and prognosis. “No medical exam” policies are also available.
Alliance Income Services Corp. (AIS) partners with the leading insurance companies in Canada today, including:
- GMS
- Assumption Life
- Manulife
- Green Shield Canada
- iA Financial Group
Our team of experienced life insurance advisors can guide you toward the right type of life insurance for people with cancer. Fill in the quotes form and we’ll search for options available to you. We look forward to working with you.
