Cancer and Life Insurance
No matter how mild, no matter how curable, the diagnosis of cancer prompts most people to think about life insurance.
No matter how mild, no matter how curable, the diagnosis of cancer almost always affects the patient’s ability to get life insurance.
This blog will address how to go about getting life insurance after being diagnosed with cancer. This is a very factual, step by step blog. But please know that my heart goes out to anyone in that position, and to your families and friends, and I pray that you find comfort in having this resource.
I. If you do not have any existing life insurance
A. Make sure you have checked with your work, your parents, your credit union, or other places where you might possibly have a policy. If you find one, also review section II.
B. Determine if you need it.
1. If you have lots of savings, few or no dependents, and are fairly debt free, you may not need life insurance at all. Keep in mind that you will have medical bills, may lose some work, and have other expenses associated with your treatment. But not everyone needs life insurance. It is your choice.
2. If you feel that even a small policy would be a big help to your family, go ahead and take what you can get.
a. Year One:
i. For the first year after diagnosis, the only kind you can get is usually Guaranteed Issue Life Insurance. It will not require an exam or medical records. You are going to think it is costly, and it will be graded. That means it will not pay 100% of the benefit until you have had it for 1-3 years. But that is all the more reason to get it now. You can always replace with a lower priced policy later on. Note: The maximum face amount you can get per policy is usually $25,000 during the first year after a diagnosis of cancer, but you can get more than one policy by going with different carriers.
b. Years One to Five:
i. After 1-5 years of being cancer free, you may be able to get Simplified Issue Life Insurance. This may be graded or it may pay 100% of the death benefit from day one. You might be able to get more than $25,000 in a single policy. Simplified life insurance will not require an exam, but could entail a phone interview and occasionally they order medical records.
ii. With some types and stages of cancer, you can get a medically underwritten policy at this time. A medically underwritten policy is one that requires an exam and medical records. You can usually get any amount of coverage that you can reasonably afford. Sometimes the carrier will add on a flat extra. This is a fee per thousand dollars of coverage that will stay on the policy for a set number of years, then drop off.
c. Five years after last cancer treatment:
i. Your chances of getting a medically underwritten policy without a flat extra, or simplified issue policy with moderate prices, are greatly improved after some years of being cancer free. You still should use an agency that specializes in impaired risk life insurance, as price ranges at this time can be clear across the board.
ii. When applying for medically underwritten life insurance, try to get a hold of pathology reports or the basics about your policy, to help your agent figure out which carrier to use. Have follow up tests done at the time of applying. Be ready to help track down medical records, if need be. Sometimes policies are declined for technicalities, but working hand in hand with a good agent can increase your chances of a good rate.
II. If you have existing life insurance
A. This is going to be the best priced policy you are going to have for a time, so do not let it lapse! It is easy to let life insurance premiums fall through the cracks with so much going on. You might want to put your policy on auto draft to avoid missing any payments.
B. If you have term insurance that is coming to the end of the term, contact your agent (or any other agent you trust) to assist you with it. You may be able to convert it to a permanent policy, rated the same preferred rating you had before you got cancer. Or you may be able to keep it in effect at a higher premium. Even term life often has options, so make sure you protect that valuable resource.
C. If you have permanent insurance, order a current illustration so that you know your policy is on track and will not lapse due to a loan or other reasons.
D. If you have life insurance through work, check to see if you can keep it even if you leave your job.
Please do not hesitate to reach out to me for advice if you or a loved one finds yourselves in this difficult situation. Anyone who has worked with me will tell you that sales are not my main focus … helping you have the resources you need is my main goal. If I can help you adjust or hang onto a policy have, that is what I will do. So please don’t be afraid to contact me. You’ve already survived a cancer diagnosis – getting life insurance is way, way less scary than that.
By Peg Mace, CEO, Outlook Life