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Cameron HuddlestonContributor
Amy DaniseEditor
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More than 1.8 million new cases of cancer are expected to be diagnosed this year, according to the American Cancer Society. It’s a chilling statistic. However, there’s another statistic that offers encouragement. The survival rate for all cancers has increased significantly over the past several decades.
It’s also encouraging to know that it’s possible to get life insurance after having cancer.
“With the many advances in cancer treatment and a long track record of success in treating the disease, insurance companies are very open and willing to insure people who previously had cancer,” says Ryan Pinney, president of Pinney Insurance.
So don’t assume that a history of cancer will prevent you from buying life insurance to protect your family’s financial security. Here’s what you need to know about how cancer affects your ability to get coverage and the rate you’ll pay.
The best time to buy life insurance is when you’re young and healthy. That’s because your age and health are two key factors in determining the rate you’ll pay for coverage.
“When you are younger and healthier, that means lower premiums,” says Matthew Sweeney, life and financial services specialist with Coverage, Inc., an independent insurance agency in Virginia.
Securing a low rate isn’t the only benefit of buying life insurance sooner rather than later. You’re much more likely to be able to get a high amount of coverage at a good price. And your insurability will be guaranteed for the entire term of your policy, Sweeney says. That means you won’t lose your coverage nor will your rate increase if you develop a health condition such as cancer.
If you don’t think about buying life insurance until your health has taken a turn for the worse, your insurability will be challenged.
“I pray for those who get a cancer diagnosis and want to scramble to take care of their loved ones with life insurance because it is much tougher to acquire affordable coverage at that point,” Sweeney says.
In fact, you likely won’t be able to get a traditional life insurance policy if you’ve just been diagnosed with cancer or are receiving treatment, he says. You’ll need to be cancer-free before you can apply for coverage.
You might be able to get a guaranteed issue life insurance policy. You can’t be turned down for coverage as long as you meet the insurer’s age requirements (the minimum age is typically between 40 and 50). But you’ll have to pay a high cost for what you get, and coverage amounts are limited—typically a maximum of $25,000 or less.
That could be enough, though, to cover final expenses such as funeral costs or medical bills. Plus, you could buy a guaranteed issue policy to have at least some coverage while undergoing treatment then apply for term life or permanent life insurance policy after you are cancer-free.
Also, guaranteed issue policies aren’t a surefire way to provide a death benefit to your family. If you pass away within the first two or three years of owning the policy, your beneficiaries typically get only a refund of the premiums you paid, not the face value of the policy.
Life insurance companies typically want to see that you’ve been cancer-free for a certain number of years before they’ll consider insuring you. The number of years depends on the type of cancer you had.
Some forms of cancer are considered less severe or life-threatening due to high rates of successful treatment, Pinney says. These types typically have shorter waiting periods than more severe and complex cancers that can often involve radiation, chemotherapy, and even bone-marrow transplants.
“Generally, less-severe forms of cancer can have waiting periods of one to three years after the date of last treatment,” Pinney says. “Other more severe forms may be as long as five years.”
The waiting period also depends on the severity of cancer you had at the time of diagnosis. For example, a woman with breast cancer caught early—in stage 1 or 2—is going to have a shorter waiting period for getting life insurance than if she had stage 3 or 4 breast cancer, Pinney says.
Waiting periods can also vary from insurer to insurer. However, here’s a sample of waiting periods for various types of cancer from the Trusted Choice network of independent insurance agents:
Unfortunately, even if you can get life insurance after cancer, you likely won’t qualify for the best rate, Pinney says. That’s because your history of cancer now makes you a higher risk to insure.
When you apply for coverage, the insurance company will ask questions about your current health, your medical history, and your family’s medical history. It also will check your medical records, prescription drug history, driving record and other information to determine in which risk class you belong. Your risk class will then be used, along with your age and gender, to determine your life insurance rate.
Insurance companies typically use three underwriting risk classes:
Those with serious medical conditions might not even qualify for the standard risk class. Insurers will use a “table rating” system of letters or numbers instead. An A or 1 rating typically costs 25% more than the premium for the standard risk class, and rates go up as the table rating increases from B, C, D, or 2, 3, 4, and so on.
Preferred rates are possible for cancer survivors, depending on the type of cancer, severity, and time since treatment was completed, Pinney says. For example, some types of skin cancer have very little impact on life insurance premiums. However, it’s more common to receive a standard rating or table rating of 1/A to 4/D following cancer.
A history of cancer will likely force you to pay more for life insurance than you would have otherwise. But there are ways to keep down the cost of coverage.
Don’t rush to get coverage. You’ll have to wait at least a couple of years after treatment before you can even qualify for a life insurance policy. However, being willing to wait a little longer after the date of a cancer-free diagnosis can pay off. “The longer it’s been since that date, the more likely you are to get the best rates based on your health history,” Pinney says. That’s because you’re showing that your treatment was successful long-term.
Improve your overall health. Use the waiting period you have to do everything you can to get in shape, kick any bad habits you might have, and get any other medical conditions under control. Being in the best possible health will increase your chances of getting a better rate.
Work with an independent life insurance agent. Independent agents work with several insurance companies and will know which ones are more willing to insure cancer survivors. In particular, look for an independent agent who specializes in impaired risk underwriting.
“These types of agents and firms have extensive knowledge and experience in underwriting cancer and many other health conditions,” Pinney says. “They can guide you through the shopping and underwriting process to ensure you get the best product and pricing based on your particular needs.”
