Understanding Life Insurance Options for Cancer Patients

Receiving a cancer diagnosis can be a life-altering event, bringing with it a whirlwind of emotions and concerns. One of the many questions that may arise is whether you can still qualify for life insurance. At O1ne Mortgage, we understand the importance of securing your family’s future, and we’re here to help you navigate your options. Call us at 213-732-3074 for any mortgage service needs.

How Does Cancer Affect Your Life Insurance Eligibility?

If you already have life insurance before your diagnosis, your policy will likely remain in effect, and your beneficiaries will receive the death benefit if you pass away from cancer. However, obtaining life insurance after a cancer diagnosis can be more challenging. Life insurance companies base their decisions on risk calculations, and a cancer diagnosis can significantly impact your eligibility and premiums.

Several factors influence your ability to get life insurance after a cancer diagnosis, including your prognosis, treatment, and the time since your diagnosis or remission. Some insurers may approve those in remission for at least five years, albeit at higher rates, while others may deny coverage outright. Early-stage cancers with high survival rates and no prior history of the disease may make it easier to get approved.

Factors Considered by Life Insurance Companies

• Family’s Cancer History: Indicates increased risk for you.
• Type and Stage of Cancer: Cancers with higher survival rates and lower recurrence rates are less risky to insurers.
• Treatments Received: Chemotherapy, radiation, or surgery details.
• Last Treatment: How long ago you received treatment and its impact on your health.
• Time Since Remission: Some insurers require a minimum wait period before selling you a policy.
• Lifestyle Habits: Alcohol or tobacco use can increase your risk for other health complications.
• Other Health Issues: Conditions like diabetes or high blood pressure.

If you already have traditional life insurance, you shouldn’t lose coverage with a cancer diagnosis unless you fail to pay your premiums or provide false information when applying, which is considered fraud and can result in no payout of death benefits.

What Types of Life Insurance Are Available for Those Living With Cancer?

Once you’ve been in remission for several years, you may become eligible for traditional life insurance again. However, if you’re currently living with cancer, undergoing treatment, facing a terminal diagnosis, or newly in remission, traditional policies may not be an option. Here are some alternatives:

Simplified Issue or Guaranteed Issue Life Insurance

These policies, also known as no-exam life insurance, are available for those ineligible for traditional life insurance. Simplified issue life insurance is for those with good or fair health and requires only a few medical questions without exams. Guaranteed issue life insurance generally requires no medical information and guarantees payout, making it suitable for older individuals or those with health problems.

The trade-off for easy approval is higher premiums and lower death benefits due to increased risk. Additionally, these plans sometimes have a graded benefit period, meaning if you die within a short time of purchasing the policy, your family won’t receive the full death benefit, though they’ll usually receive at least the premiums with interest.

Group Life Insurance

Some employers offer optional life insurance as an employee benefit, either at no cost or a reduced cost. Life insurance obtained through your employer is typically guaranteed coverage and easier to qualify for. If you’re working and covered by a group life insurance policy and develop cancer, you won’t lose your policy. However, this type of insurance only exists while you’re employed and may have coverage limits tied to your salary.

Life Insurance Riders

If you already have a life insurance policy but it doesn’t cover cancer, you may be able to add or activate riders for additional benefits. An accelerated death benefit rider or terminal illness rider allows those diagnosed with certain terminal illnesses to receive some of their death benefit while alive. Some insurers also offer chronic or critical illness riders, which work similarly.

Cancer Insurance

Some insurance companies offer cancer insurance, providing cash benefits for medical bills and other expenses if you get cancer. However, these policies usually must be purchased before getting cancer or after many years of remission. While you may spend money on premiums and never need it, it could be beneficial if your family has a strong history of cancer or you fear future recurrence.

Finding Life Insurance While in Remission

If you could only qualify for guaranteed issue life insurance while fighting cancer but enter remission, you might later switch your policy to a traditional one. Or, if you didn’t have life insurance, you could potentially qualify for new traditional life insurance after a few years of remission.

Traditional life insurance comes in two basic types: term and whole life (also called permanent). Term life insurance is less expensive and bought for a set period, such as five, 10, or 20 years, after which it expires. You might be able to renew it, though premiums could increase, and renewal could be denied if your health worsens. Some term policies can be converted into whole life policies.

Whole life insurance lasts until you die. The premiums are typically higher than term policies, but coverage is usually for life, and the policy builds cash value you can access.

Depending on the insurer, cancer survivors could qualify for one or both types of policies after a certain period of remission. Timing requirements can vary by company rules and cancer type; some insurers require 10 years of remission, while others may permit as few as two years. Some cancers, like skin or prostate cancers, might have shorter waiting periods.

If you’re less than five years out from remission, some traditional life insurance policies could approve you rather than outright rejecting you. Just prepare for much higher premiums. Since restrictions and costs for cancer survivors vary greatly by insurer, it’s worth shopping around to obtain multiple quotes.

The Bottom Line

If you’re diagnosed with cancer, know that there are options for getting life insurance. However, as long as you’re still in treatment or newly in remission, options are limited and costlier. The best way to ensure coverage is to have a term or whole life insurance policy already in place before you get sick. That way, if you get cancer and it becomes terminal, you’ll know your existing policy will be there to help your loved ones.

At O1ne Mortgage, we are committed to helping you secure your family’s future. For any mortgage service needs, call us at 213-732-3074. Our team of experts is here to guide you through the process and find the best options for your unique situation.