Buying life insurance after a cancer diagnosis is complicated and expensive, but you will likely be able to purchase a policy. However, you'll need to determine whether the cost and available coverage make sense for your financial situation. Cancer patients typically only qualify for guaranteed issue policies with limited coverage and restricted payouts for the first few years.
Cancer survivors in remission, who have been out of treatment for two to five years, are more likely to qualify for a traditional term or permanent life insurance policy. Rates will be higher, however, and a few forms of cancer preclude acceptance for coverage.
Does life insurance cover cancer?
Term and permanent life insurance policies do cover cancer. If you pass away due to cancer during the coverage period, your beneficiaries will receive the death benefit. The only policies that don't cover cancer are accidental death and dismemberment policies, which only pay out when you are injured or die from an accidental cause.
When purchasing cancer life insurance — whether you are a survivor or in treatment — it's very important to be upfront with your insurer. Though life insurance does cover cancer, if the insurer can demonstrate that you intentionally misrepresented your health or were fraudulent in your application, your beneficiary's claim could be denied.
During the first two years of a policy, there will usually be a contestability period. This means the insurer can contest a claim if information you provided 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 if you're in remission and otherwise healthy, you will often be able to purchase coverage. Certain types of cancer can cause you to be rejected for a policy, but if you've consistently been in remission for several years, you'll be able to buy term or permanent life insurance in most cases. However, if you're unable to show that your cancer is in remission, or if you have another condition—such as diabetes—you may receive very expensive quotes or not be able to buy a policy at all.
Buying life insurance after cancer
Along with being healthy, a key qualifier for purchasing life insurance is the length of time post-cancer. Depending on the insurer and the type and stage of cancer, you may have to wait two to five years from your last treatment before getting approved for life insurance. If your cancer is in remission but you're undergoing more than one surveillance appointment per year, you may still be considered a patient in active 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 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 smoother time purchasing life insurance if they're able to answer all of these questions in detail, backed up with medical records. You may also need to demonstrate that you're following any prescribed treatment plan exactly, including medications and follow-up appointments.
How your type of cancer impacts life insurance
Whether a cancer survivor gets approved for life insurance depends on the type of cancer and how it progressed. Cancers that metastasized, or spread to different parts of the body, are considered higher risk and could cause a rejection. If the 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 life insurance rate. For that, you would need to be in excellent health and have several years post-treatment with no issues.
Breast cancer, prostate cancer, testicular cancer and thyroid cancer survivors are considered moderate-risk, but survivors can often qualify for standard rates. Insurers will ask 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 had several years in remission, you will likely qualify for a life insurance policy but at nonstandard, or higher, rates. A few forms of cancer are generally considered too risky to cover, such as leukemia, pancreatic cancer and colon cancer. Seldom are survivors of one of these conditions approved for coverage.
Life insurance for cancer patients
You can qualify for a life insurance policy with cancer, though your options are significantly 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 best bet is either to purchase a guaranteed whole life insurance policy, which has restrictions, or get group life insurance, which can be guaranteed issue.
While both routes are available to terminally-ill cancer patients, we recommend only pursuing guaranteed issue life insurance policies with no waiting period, such as group life insurance. Policies with a waiting period will not pay the death benefit to your beneficiaries during the first two to three years of coverage. 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. If you can't get coverage through your work or an association, you may not be able to buy a policy.
If you want to purchase additional coverage to supplement a life insurance policy you already have, you may be able to do so through your insurer, though it depends on your existing policy and the coverage you want to add. 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 with lifetime coverage, and with a conversion, you wouldn't have to undergo underwriting. On the other hand, increasing the death benefit on your existing term policy would require additional underwriting, which might not get approved. We recommend checking the terms of your existing policy, looking particularly at conversion options and riders that were either added or could be added, that would increase your coverage without a review of your health.
Guaranteed whole life insurance
Guaranteed life insurance, also called burial insurance, can be purchased regardless of whether you have a cancer diagnosis or are undergoing treatment. This is a type of whole life insurance, so coverage extends for your lifetime. Burial life insurance policies are primarily aimed at seniors and most aren't available if you're under age 45. You won't be disqualified for cancer or other health issues. However, they're more expensive than term or other permanent life insurance policies and have several critical restrictions:
- 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 cover college tuition for your children if you die, that would not be accomplished with a burial insurance policy. However, the death benefit could be sufficient to pay for funeral costs or end-of-life expenses.
- Waiting period: Guaranteed life insurance policies have a waiting period of two to three years, so they're a bad choice for terminal cancer patients. During the waiting period, your family would only receive the full death benefit if you happened to die in an accident. If you died from cancer, they would receive only a return of premiums paid plus interest.
Despite 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. 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 might do better 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 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 check the terms of the plan.
Quotes for group life insurance are higher than those for standard term life policies. Premiums are primarily based on your age instead of health, so cancer wouldn't increase your rates with guaranteed issue coverage. If you later left the job, such policies are usually convertible to permanent life insurance, so you wouldn't have to give up your coverage.
Life insurance with a family history of cancer
Having a family history of cancer will increase your rates, but how much it does depends on your family's medical history. Insurers typically want to know:
- The type of cancer.
- The number of relatives diagnosed and how you were related.
- The age at which your relative was diagnosed. If they were a senior, this will likely have a lower impact on your rates than if they were young.
Paying for cancer treatment and costs with life insurance
Cancer patients that already have life insurance may be able to use their coverage while still alive, to pay for medical expenses or provide their family with supplemental income. Whether you can do so depends on the type of policy, your health and whether you added riders when purchasing 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 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, borrowing up to the amount of the policy's cash value. Since the insurer holds the cash value as collateral, 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 outstanding loan amount if you die.
If you're terminally ill or in poor health, you may consider a life insurance settlement, which means selling your 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 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 is likely to pay premiums for only a short period of 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 one of the most common is an accelerated death benefit rider. These allow you to access the death benefit if you're terminally ill, and sometimes even if you're chronically ill. The terms change by insurer though, so verify whether your cancer's progression qualifies you to use any of your riders.