Life insurance for cancer patients
If you’ve been diagnosed with cancer, you may still be able to get covered with life insurance to protect your family financially. Here’s what you need to know.
Understanding life insurance and cancer
You’ve gotten the news that no one wants to hear – “it’s cancer.” As you look ahead, it’s hard not to worry about keeping your family’s future secure if the worst happens.
It’s important to remember that while a cancer diagnosis is scary, you’re not alone. Roughly 1.8 million Americans are diagnosed with cancer each year, with breast cancer being the most common. Knowing the statistics, your options, and having a sense of community during this time can greatly help with finding peace of mind. It’s also understandable to want to plan for your family’s financial future, no matter what happens – and that’s why life insurance exists.
Life insurance helps you make sure your loved ones are taken care of if you pass away. After your death, the policy will pay out a lump sum to help them cover expenses like day-to-day essentials, leftover debts, and funeral costs.
If you’re worried about not qualifying for life insurance or rates being too high, don’t worry – there’s a life insurance option out there for nearly everyone. Here’s what to know about qualifying for life insurance as a cancer patient or survivor.
Can you get life insurance if you have cancer?
Yes, it’s possible to qualify for life insurance, even if you have a past cancer diagnosis. Generally, insurance companies will look at these factors when considering life insurance for cancer patients and survivors:
- When you were diagnosed: Many insurers consider five years the cutoff point for a cancer diagnosis when deciding if you qualify for traditional life insurance. If you’ve been cancer-free for five years or more, you can often qualify for a term or permanent life insurance policy. With some types of diagnoses, like certain skin cancers or prostate cancer, your life insurance company may approve you even sooner.
- The type of cancer: Insurers are more likely to approve you if you had a type of cancer with a higher survival rate, like some forms of skin cancer.
- Treatment and health status: Insurers will want to know about your treatment plan, the types of treatment you’ve received, the date of your last treatment, and how it has affected your overall health.
- Age and overall health: If you’re young and relatively healthy, you’re more likely to qualify for lower rates. Lifestyle habits, like smoking and drinking, may also factor in.
Each insurance company has its own guidelines, so you should make sure to consult a life insurance agent about which one is the best fit for you, based on your health history.
Types of life insurance for cancer patients and survivors
- Traditional life insurance: If you’ve been in remission for more than five years, traditional life insurance could still be an option. Your options include term life, which offers affordable coverage for 10 to 30 years, or permanent, lifelong options with a cash value component. You may need to take a medical exam to help determine your rates for term life insurance or permanent life insurance.
- Simplified issue: Cancer-free but not in perfect health? Simplified issue life insurance can help you access the coverage you need. While there’s no exam, you may have to fill out a health survey and submit your medical history. Simplified issue is also relatively affordable, with a $250,000 simplified issue policy costing only slightly more than a traditional plan with a medical exam in many cases. Another plus: You’re eligible for the full amount from day one.
- Guaranteed issue: If you were recently diagnosed with or are actively still dealing with cancer, guaranteed issue life insurance can still make sure you’re covered. With no medical exam, survey, or medical history requirements, you can’t be turned down based on your health. The premiums tend to be higher and coverage amounts lower than other policies, but it can be a great fit for people who don’t qualify for other insurance. Guaranteed issue also has a graded period at the beginning of the policy, where you would not receive a payout if you died of a health-related issue. If your death is accidental, you still receive payment and most providers will refund premium payments, no matter what. After the graded period, you become eligible for the full amount.
- Final expense: Designed for people over 50, this policy helps pay for end-of-life costs, medical bills, or debts. It can work well for cancer survivors because it doesn’t require a medical exam. The coverage levels are also lower, usually $5,000-$35,000, which means the premiums are more affordable than traditional policies.
Will life insurance pay out if you die of cancer?
As long as your policy is active and you’re following your policy rules, life insurance companies typically pay out for death because of any type of illness, including cancer. This is tax-free money that your family can use to cover anything they need.
Many families will use life insurance payouts for:
- Replacing income
- Paying the mortgage
- Covering credit card bills or other debts
- Paying for day-to-day expenses, like groceries and car expenses
- Saving for college
- Covering funeral costs or related medical debts
When you buy a policy, think about those types of expenses and what your family might need to cover. Life insurance should fill the gap between expenses and any savings or other sources of income you may have. You can calculate the payout amount you’ll need with our term life insurance calculator.
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