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How to buy life insurance after being diagnosed with cancer

How to buy life insurance after being diagnosed with cancer?

About 60% of Americans have some form of life insurance.

But for the other 40%, cost or the inability to qualify for coverage may leave them without this protection.

That’s especially problematic for cancer survivors and people with cancer.

They may have a more difficult time getting quality life insurance.

If you or a loved one are in this situation, here’s what you need to know about getting life insurance.

Can you get life insurance when you have cancer?

If you are currently undergoing treatment for cancer, or if you have had a cancer diagnosis within the last two to four years, it’s very likely that you will not be able to purchase a traditional life insurance policy (term/whole life) and will have to purchase a more expensive final expense policy until the waiting period is over. 

Life insurance waiting period for different cancer types

Type of Cancer Likely Waiting Period Other Factors
Breast 1 to 5 years Dependent upon stage
Lung 3 to 5 years With Stage 1 consideration can be three years from the end of treatment; Stage 2 is typically 5 years
Colorectal 1 to 6 years Stage 1, 2, and 3 have different waits
Uterine 2 to 5 years Stage 0 or 1 may qualify after 2 years, but rates will be high. After 4 to 5 years rates may be better. Beyond Stage 2, applicants will likely be denied
Hodgkins and Non-Hodgkins Lymphoma 3 to 10 years The time period is for Stages 1 & 2 only; others will likely be denied
Prostate 6 months to 2 years Stages 1&2, A, B can be as short as 6 months; Stage 3, C is likely 2 years
Bladder 1 to 3 years or greater 1 to 2 for Stage A; 3 or greater for Stage B
Melanoma 1 to 5 years 1 year for early detection; 2 to 5 years for deeper lesions; not at all for metastatic cancer
Testicular 6 months to 2 years 6 months for cancer that has not spread; 2 years for most others
Leukemia 5 to 10 years Dependent upon type; some are not insurable
Kidney 1 to 5 years T0 & T1 wait is 1 to 2 years; T2 & T3 can be up to 5 years
Pancreatic 2 years The waiting period only applies when cancer is detected in early stages; others will be declined
Cervical 0 to 1 year For Stage 1 or in-situ cancer
Esophageal 3 years Dependent upon stage
Larynx 1 year Dependent upon stage
Ovarian 1 to 5 years or more Dependent upon the stage and whether or not cancer has metastasized
Bone 5 years or more Dependent upon type; some are not insurable
Basal Cell Carcinoma 0 to 3 months This type may have no waiting period if cancer has not spread

Types of cancer and options for life insurance

If you qualify for a policy, insurers will use different ratings to determine your premium.

These ratings include:

  • Super Preferred (or Preferred Plus)
  • Preferred
  • Standard (or Regular)
  • Substandard

With that being said, technically, you are eligible for Super Preferred, you are most likely being rated Standard or Substandard.

Instant approval and cancer

Instant approval typically is a feature of term life insurance. With instant approval, an insurer will use a computer algorithm to predict your life expectancy and risk.

There’s no exam or onerous paperwork. You just provide your medical history, age, height and weight, address, and information on your lifestyle habits.

The insurer will then use the data to make a quick decision. A recent cancer survivor or someone currently undergoing treatment won’t likely be eligible for instant approval.

“Often a pre-existing condition within the last three to five years will require a life insurance application to be manually reviewed by an underwriter.

Therefore, these cases are typically not instantly approved,” Holloway says.

Life insurance for cancer survivors

Survivors who have been cancer-free for several years may be able to qualify for a policy. Most health institutions typically release data around five-year survival rates.

For example, the five-year survival rate for breast cancer is 90%.

For skin cancer, it’s 92%. Statistics show that for most cancers, the longer the disease is in remission, the less likely it is that cancer will come back.

For this reason, many survivors celebrate their five-year anniversary of being cancer-free.

This milestone also may be a good time to apply for life insurance, especially if you had cancer with a high five-year survival rate.

Permanent vs. term life insurance

For even the healthiest person, a permanent life policy, such as whole life, is considerably more expensive than term life insurance.

Even if your cancer has been in remission for several years, you’ll likely face higher life insurance premiums than someone without this medical history.

In that case, a term life policy — which offers coverage for a period of anywhere between five to 30 years in exchange for lower premiums — may be a better option than a whole life policy.

However, this also depends on your insurance needs, budget, and income.

If you can afford the whole life policy’s higher premium in exchange for a death benefit that doesn’t expire, whole life insurance may be a good option.

Final expenses and burial insurance

If you can’t get traditional life insurance, you may be able to get final expense insurance.

Final expense insurance, also known as burial insurance, can be either a term life or whole life policy.

You can get a simplified issue policy, which entails answering a few medical questions as part of the underwriting process.

Another option is a guaranteed issue policy, which doesn’t involve any medical questions.

You also can get a policy with a “graded death benefit.”

These policies increase the death benefit to your beneficiaries over the life of the policy — as long as you don’t die within the first few years.

Your beneficiaries can use this insurance to pay for funeral expenses, housing expenses, or other costs.

However, the trade-off with final expense insurance is that the policy amounts are fairly low compared to traditional life insurance.

Typically, a final expense policy may have a face value that ranges from $5,000 to $50,000.

Life insurance riders for cancer

If you qualify for life insurance after a cancer diagnosis, consider adding certain policy riders.

You might consider adding an accelerated death benefit, which gives your beneficiaries early access to your death benefit if you’re diagnosed with a terminal illness. A critical illness rider also can provide a cash benefit to help you pay for treatment if you have a qualifying illness.

A long-term care rider may be a good addition to your policy if you’re concerned about how to pay for long-term care in a nursing home or assisted living facility.

Keep in mind that any rider you add will increase your premium, so consider what additional coverage you actually need and if it fits into your budget.

Getting life insurance after a cancer diagnosis

Whether you have cancer or another pre-existing condition, getting life insurance likely will be more difficult and include higher premiums.

While it might be more challenging to get a policy individually, you may be able to get life insurance through your employer if your company offers a group life insurance plan. The coverage limits on these policies are typically lower since insurers need to offset their risk.

However, pairing a group policy with final expense life insurance may provide some coverage to your beneficiaries instead of term or whole life coverage.

Dealing with a cancer diagnosis is difficult enough without insurance concerns.

But explore all your options to get some life insurance protection, so that you and your family aren’t left with no coverage at all.

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