Although medicine is making huge strides in cancer treatment, many forms of cancer are life limiting. That can make getting life insurance for cancer patients a real challenge. The National Cancer Institute projects that approximately 39.5% of people will be diagnosed with cancer at some point during their lives.
If you have cancer, you may want life insurance to provide for your family or for your final expenses. Fortunately, having cancer doesn’t automatically make you ineligible for coverage. Many insurance companies will issue life insurance to some cancer patients and survivors. Whether and what type of life insurance is available to you depends, in part, on where you are in your treatment.
- If you’ve completed treatment and have been free of cancer for at least five years, you may have an easier time getting coverage.
- Life insurance is more expensive if you have cancer, and coverage may be limited.
- Guaranteed issue policies don’t require a health exam or ask health questions.
- You may be able to get life insurance through your employer with a higher coverage amount and lower premium, relative to what you could get from a private insurer.
- If you have a term life insurance policy, you may be able to convert it into a permanent policy.
Can You Get Life Insurance If You Have Cancer?
Because it is such a serious disease, cancer survivors generally need to be in remission to qualify for affordable life insurance premiums. Usually, this means you have ended treatment and been free of cancer for five years, but the actual amount of time may vary, depending on the type of cancer and the insurer.
What Determines the Cost of Life Insurance?
The price of life insurance is based, in part, on the amount of the benefit that will be paid out and the length of time the policy is expected to be in force.
For this reason, life insurance policies are cheaper for people who are expected to live longer. This is because the insurance company has more time to invest the premiums paid and make a profit before it has to pay the death benefit. That’s why age, health, occupation, and family history come into play when determining your life insurance premium.
For example, a 55-year-old commercial fisherman who has high blood pressure and whose parents died of heart attacks before they turned 60 will pay more than a 35-year-old elementary-school teacher with no health concerns and living parents and grandparents.
But, unfortunately, life insurance companies sometimes make the decision not to insure someone at all, especially if they have a life-threatening disease.
Life Insurance Policies for Cancer Patients and Survivors
Life insurance for cancer patients and survivors may be available, but premiums will be higher if you're applying after receiving a cancer diagnosis.
Many insurance companies offer life insurance policies for people who have treatable forms of cancer. If you’ve been out of treatment for several years with no relapse, and you have a life expectancy close to normal, you may be able to get a term or whole life policy. Your acceptance depends on how the insurer assesses your risk. However, you’ll still need to pay more for coverage than someone who has never had cancer.
If you can’t qualify for these policies, another option is a guaranteed issue life insurance policy. This policy allows older people and people with a life-limiting diagnosis to obtain life insurance without a medical exam or medical questions. The premiums are higher than for standard life insurance policies, and coverage amounts are lower (policies often limit coverage to $25,000). Plus, payouts are usually limited if you die within two years of the policy’s issue date.
Guaranteed issue policies generally have a graded death benefit. For example, if you die within the first two years of the policy, it may only pay your beneficiaries 120% of the premiums you paid instead of the full death benefit.
Cancer patients and survivors may find that their best term life insurance option is through their employer. Most employees are eligible for coverage no matter what health issues they have. Plus, these policies tend to be more affordable than policies on the open market. Keep in mind that employer-provided life insurance is usually temporary; it only covers you for as long as you’re employed with that particular company. Check with your human resources department for more information.
Alternatives to Purchasing Life Insurance
If you can’t get approved for a traditional life insurance policy, you have alternative options.
If you already have a term insurance policy, including one from an employer, you may be able to convert it to a permanent life insurance policy without needing to go through medical underwriting. Check your policy documents, talk to your current insurance company, or talk to your HR department to see if you have this option.
A prepaid funeral is a non-insurance alternative that can save your family money and hassle while they are grieving. “Guaranteed” contracts will cover funeral costs at the rate you prepaid, even if that rate increases by the time of the funeral. Know whether your plan is guaranteed, revocable, refundable, transferable, and/or portable before you purchase a prepaid funeral.
Prepaying for your funeral or burial plot with an irrevocable funeral contract (which cannot be canceled or refunded) can help you “spend down” assets to qualify for Medicaid.
A Timeline for Life Insurance Coverage Options
The timeline for applying for life insurance will depend in large part on your diagnosis. Your care team should be able to give you an idea of how long treatment will take and when or if the cancer is likely to go into remission.
In general, guaranteed issue policies are available at any time, but purchasing them earlier in your treatment will help ensure you outlive any graded benefit reductions. Other policies are generally available only after you are in remission.
Life insurance is part of an estate plan—it’s not an estate plan itself. Whether or not you buy life insurance, make sure your estate is in order and your will is up to date.
Frequently Asked Questions (FAQs)
Where can I get life insurance for cancer patients?
Several life insurance companies offer life insurance for cancer patients. Depending on the company, you can apply online, use an insurance agent, or contact your employer’s human resources department.
How much life insurance should I have?
The amount of life insurance you need will depend on your age and responsibilities. Start by thinking about what expenses your loved ones will have because of your death:
- Will your family be able to cover the cost of a funeral and make the mortgage payment every month?
- Do you have dependent children who need a college or education fund?
- How much additional income will your family need to maintain their standard of living without you?
Also, consider the assets you already have. If they would be enough to meet these costs, you may not need life insurance.
What is the difference between permanent life and term life insurance?
Term life is purchased to cover a specific amount of time, such as 10 or 20 years, and it expires when that period ends. Permanent insurance can be either whole life insurance or universal life insurance, and is designed to provide coverage for your entire life—hence the name.