Life Insurance for Cancer Patients & Survivors

Life Insurance for Cancer Patients & Survivors

Buying life insurance after a cancer diagnosis will be more difficult and expensive, but you will be able to purchase a policy. However, you need to determine whether that policy's cost and the coverage offered make sense for your financial situation. Current cancer patients will typically only qualify for guaranteed issue policies that offer limited coverage and have restricted payouts for the first few years. Cancer survivors that have been in remission and out of treatment for two to five years are much more likely to qualify for a traditional term or permanent life insurance policy. But rates will still be higher, and there are a few forms of cancer that may preclude you from being accepted for coverage.

Does Life Insurance Cover Cancer?

Term and permanent life insurance policies cover cancer, so if you pass away due to cancer during the period of coverage, your beneficiaries will receive the policy's death benefit. The only policies that don't cover cancer are accidental death and dismemberment policies, as these pay a benefit if you die or are injured from an accidental cause.

However, when you're purchasing cancer life insurance, whether you're in treatment or are a cancer survivor, one of the most important things to do is be upfront with your insurer. Though life insurance policies cover cancer, if the insurer can demonstrate that you intentionally misrepresented your health or were fraudulent in your application, your beneficiary's claim can be denied. During the first two years of coverage, in particular, your policy will usually have a contestability period, meaning the insurer can contest a claim if any of the information provided to the company was questionable. Providing a complete and honest history will help to ensure your beneficiaries receive the money you intended them to.

Life Insurance for Cancer Survivors

Life insurance is more expensive for cancer survivors, but you will often be able to purchase coverage so long as you're in remission and otherwise healthy. There are certain types of cancer that will cause you to be rejected for a policy, but, in most cases, if you've consistently been in remission for several years, you should be able to buy term or permanent life insurance. However, if you're unable to show that your cancer is in remission or have another condition, such as diabetes, you may not be able to buy a policy, or the quotes you receive will be quite expensive.

Buying Life Insurance After Cancer

In addition to being healthy, a key qualifier for purchasing life insurance post-cancer is time. Depending on the type of cancer you had, its stage, and the insurer, you may have to wait between two to five years from the time of your last cancer treatment before being approved for life insurance. And even if your cancer is in remission, if you're undergoing more than one surveillance appointment per year, you may be considered to still be an active patient in treatment.

When you apply for a life insurance policy after cancer, the insurer will ask a number of questions about your diagnosis and treatment, such as:

  • When you were diagnosed.
  • If you have any family history of cancer.
  • The type of cancer you had, its stage and whether it metastasized.
  • The treatments you underwent, when they began and your last treatment date.
  • Whether you're in remission and, if so, how long you have been.
  • Where your cancer was located, its size and if it affected your lymph nodes.
  • If you've had any relapses.
  • Any medications you're currently taking.

Ex-cancer patients will have a much smoother time purchasing life insurance if they're able to answer all of these questions in detail, particularly if you can verify the information via medical records. You may also need to demonstrate that you're following any prescribed treatment plan exactly, including taking medications and participating in follow-up appointments.

How Your Type of Cancer Impacts Life Insurance

Whether a cancer survivor is approved for life insurance also depends on the type of cancer you had and how it had progressed. Cancers that have metastasized, or spread to different parts of the body, are considered higher risk and could cause you to be rejected for coverage. Whereas if your cancer was in-situ, or localized, you'd be considered a lower risk.

Nonmelanoma skin cancer is the only form of cancer that's low-risk enough that you're likely to qualify for a preferred rate when applying for life insurance. Even so, you would need to be in great health and have several years post-treatment with no issues.

Breast cancer, prostate cancer, testicular cancer and thyroid cancer survivors are considered a moderate risk, but survivors can qualify for standard life insurance rates. Insurers will ask a number of questions about your diagnosis, treatment and health, and you'll be more likely to be approved the longer you've been in remission.

If you've had another type of cancer, such as melanoma or cervical cancer, and have had several years in remission, you will likely qualify for a life insurance policy but will likely face nonstandard, or higher, rates. There are just a few forms of cancer that insurers generally consider too risky to cover, such as leukemia, pancreatic cancer and colon cancer. In fewer cases are cancer survivors that have had one of these conditions approved for coverage.

Life Insurance for Cancer Patients

You can get a life insurance policy if you have cancer, but your options are significantly more restricted. Most term and whole life insurance policies are not available to cancer patients, and you'll be rejected if you apply for coverage. Instead, your options will likely be to either purchase a guaranteed whole life insurance policy, which have a number of restrictions, or to get group life insurance, which can also be guaranteed issue.

While both of these routes are available to terminally ill cancer patients, we'd recommend only pursuing guaranteed issue life insurance policies that don't come with a waiting period, such as group life insurance. Policies that have a waiting period will not pay the death benefit to your beneficiaries during the first two to three years of coverage, and, if you don't expect to live that long, your premiums may be wasted. Unfortunately, guaranteed issue life insurance policies with no waiting period aren't available to everyone, so if you can't get coverage through your work or another association, you may not be able to buy a policy.

If you already have a life insurance policy and want to purchase additional coverage, you may be able to do so through your insurer, but it depends on your existing policy and the coverage you want to obtain. For instance, if you currently have a term life insurance policy and are happy with the amount of coverage in place but want a longer period of coverage, this is likely feasible. Most term life insurance policies can be converted to a permanent policy that provides lifetime coverage and you won't have to undergo underwriting by using the conversion option. On the other hand, if you have a term policy and want to increase your death benefit, this likely won't be an option as you would need to go through additional underwriting. We recommend you check the terms of your existing policy, looking particularly at conversion options and riders that were either added or could be added to increase your coverage without a review of your health.

Guaranteed Whole Life Insurance

Guaranteed life insurance, also called burial insurance, can be purchased even if you were recently diagnosed with cancer or are undergoing treatment currently. Guaranteed life insurance policies are a type of whole life insurance policy, so coverage extends for the length of your lifetime. Burial life insurance policies are primarily aimed at seniors; most aren't available if you're under the age of 45, but you won't be disqualified for cancer or any other health issue. However, they're more expensive per dollar of coverage than term or other permanent life insurance policies and have several critical restrictions:

  • Limited death benefit: Unlike life insurance policies that include medical underwriting or have health qualifiers, guaranteed issue life insurance policies usually have a maximum death benefit between $25,000 and $50,000. So, for example, if you were buying life insurance to ensure your children could pay for college if you passed away, that goal may not be accomplished with a burial insurance policy. However, the death benefit would likely be sufficient to pay for funeral costs or other end-of-life expenses.
  • Waiting period: Every guaranteed life insurance policy has a waiting period that extends two to three years, making these policies a bad choice for terminal cancer patients. During the waiting period, your family would not receive the full life insurance payout if you died from cancer—they would only receive the death benefit if you died in the course of an accident. If you died from cancer, they would just receive a return of premiums paid plus interest.

Even with these restrictions, guaranteed life insurance will likely be the best option for cancer patients, and we recommend comparing quotes and coverage options from multiple insurers if you need a policy. But you should also compare these options to group life insurance, as well as the amount you could leave your family by simply saving. Life insurance quotes for cancer patients will usually be expensive through any channel, so you may do better by instead saving and investing the money you would otherwise spend on premiums.

Group Life Insurance

Group life insurance may be available if you're a veteran or member of certain organizations, but it's most commonly available through employers. You may be able to purchase coverage with cancer if your work, or your spouse's employer, offers group life insurance policies, as these are often guaranteed issue up to a certain amount of coverage. Higher levels of coverage though will have medical underwriting, so you should check the terms of the life insurance plan.

Quotes for group life insurance are higher than those for standard term life insurance policies. But the cost is primarily based upon your age instead of your health, so having cancer won't increase your rates, so long as you're only buying guaranteed issue coverage. And if you leave your job, policies are usually convertible to permanent life insurance, so you don't have to give up your coverage.

Life Insurance with a Family History of Cancer

Having a family history of cancer will likely increase your life insurance rates, but the degree to which it does so will depend on the details of your family's medical history. Insurers will typically want to know:

  • The type of cancer, as certain types are more likely to be passed genetically than others.
  • The number of relatives diagnosed and how you were related to them, since these factors can also indicate how likely you are to be impacted.
  • The age at which your relative was diagnosed with cancer. If they were diagnosed as a senior, this will likely have a lower impact on your life insurance rates than if they were diagnosed while young.

Paying for Cancer Treatment & Costs with Life Insurance

Cancer patients that already have a life insurance policy may be able to use their coverage while still alive in order to pay for medical expenses or provide their family with supplemental income. Whether you can do so will depend on the type of life insurance policy you have, your health and whether you added riders when purchasing your life insurance policy.

If you have 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 similar to canceling it—you will no longer have coverage and won't have to pay premiums. In return, you'll receive the sum of the policy's cash value minus any surrender fees. Cancer patients can also take out a life insurance policy loan. With a policy loan, you can borrow money from the insurer up to the amount of the policy's cash value. Since the insurer holds the cash value as collateral, the company has very little risk, so there is no credit check, no repayment schedule and very low interest rates. The only downsides are that if your cash value drops to zero, your policy may lapse and the death benefit your beneficiaries receive will be reduced by the amount of any outstanding loan if you die.

If you're terminally ill or in poor health, you may also want to consider a life insurance settlement, which is the term for selling your life insurance policy. The buyer takes over paying premiums and, in exchange, they receive your policy's death benefit when you pass away. Most life insurance settlements are for permanent life insurance policies, but you may be able to sell a term life insurance policy if you can demonstrate that you're likely to pass away soon. Life insurance settlements will offer a larger payout while you're still alive than a policy loan or surrender, since the buyer pays a price between your policy's cash value and its death benefit. However, the amount of money you receive in excess of the policy's cash value depends on your health. For instance, if you have terminal cancer and your doctor projects that you'll die in the next year, you'll receive a higher price since the buyer expects to pay premiums for a short period of time.

If your life insurance policy includes "living benefits" riders, or policy add-ons, you may be able to use these in order to use these to pay medical costs while still alive. Every life insurance policy has its own set of riders, so we recommend checking your policy's specifics, but one of the most common riders included with coverage is an accelerated death benefit rider. Accelerated death benefit riders usually allow you to access the policy's death benefit if you're terminally ill, and some let you do so if you're chronically ill as well. The terms change by insurer though, so you'll need to verify whether your cancer's progression qualifies you to use any of your riders.

Maxime Croll

Maxime is a Director at ValuePenguin focusing on the insurance industry. Previously she was the Director of Product Marketing at CoverWallet, a commercial insurance startup, and helped launch NerdWallet's personal insurance business. Maxime has contributed insurance insights and analysis to Forbes, USA Today, The Hill, and many other publications.

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