Life Insurance and Cancer

  1. Life Insurance and Cancer: Background
  2. Does life insurance cover cancer?
  3. Can you get life insurance with cancer?
  4. How to get life insurance with cancer?
  5. Where can I get life insurance if I have cancer?
  6. What is cancer life insurance?

Life Insurance and Cancer: Background

Life insurance, from the insurers’ perspective, is all about risk and the ability to evaluate the uncertainty associated with the many different types of applicants. When it comes to a risk of being impacted by cancer, insurers must consider these alarming statistics as shared by the Canadian Cancer Society:

  • Cancer is the leading cause of death in Canada with 1 out of 3 deaths being due to cancer (~30% of all deaths); it is followed by heart disease (~20% of all deaths)
  • There will be 225,800 new cancer cases in Canada in 2020
  • 83,300 people will die due to cancer in 2020
  • Cancer disproportionally impacts Canadians aged 50 and older but can occur at any age.

It’s no wonder that insurers are concerned when they have an applicant who is a cancer survivor or has been recently diagnosed with cancer. Let’s look at the typical question people have about life insurance and cancer.

Does life insurance cover cancer?

If you are a policy holder that properly disclosed your health situation when applying for life insurance, and the policy has been issued, life insurance will cover newly diagnosed cancer. If misleading information was provided to an insurance company (e.g. no information about being diagnosed with cancer or being a cancer survivor), your insurance company may deny coverage or claims.

Please note that different types of life insurance are easier (or harder) to obtain based on your diagnosis and progression of the illness. Traditional life insurance will have an extensive questionnaire with a number of questions related to cancer. Simplified issue life insurance will have just one or two questions related to your cancer risks. Guaranteed issue life insurance will have no questions as it does not have any questionnaire. However, with guaranteed issue life insurance, a two-year waiting period is required. If you have cancer but have a good prognosis and do not expect to pass within two years, guaranteed issue is an ideal policy. You may be denied traditional or simplified issue insurance, but you can get guaranteed issue life insurance no matter the state of your health. If things were to take a turn for the worse and you pass within that two year window, the claim is not paid, but the premiums are returned to your beneficiary.

Discuss questions about life insurance and cancer with your life insurance company and get their response in writing.

Can you get life insurance with cancer?

Yes, you can get life insurance with cancer as there are different life insurance policies available. Some are best for less serious cancer cases (e.g. earlier cancer stage, stable situation, etc.), others are a good fit for more serios situations (e.g. recent treatments, not having a stable health condition due to cancer, etc.).

All cases are assessed on an individual basis, but the general outcomes can be expected:

  • Cancer diagnosis is 10+ years ago and you have been stable since then: You have a good chance to receive traditional life insurance and get standard rates (similar to those who did not have any serious health issues).
  • Cancer diagnosis is 5-10 years ago and you have been stable since then: You have a good chance to get traditional life insurance and get a rated policy (higher insurance rate but you can still benefit from other aspects of a traditional life insurance policy such as high coverage limits, no waiting periods, etc.).
  • Cancer diagnosis is 2-5 years ago and you have been stable since then: You might be able to apply for rated traditional or simplified life insurance. Simplified insurance has no medical exam, a short questionnaire of medical questions, higher rates, and lower coverage limits than traditional insurance.
  • Cancer diagnosis is less than 2 years ago: You can apply for a simplified or guaranteed life insurance policy. Guaranteed life insurance has no medical exams and no medical questionnaire, but also has the highest rates and lowest coverage among all the options. A two-year waiting period is also in force; if the life insured passes within the first two years of the policy being issued, a claim is not paid, but the premiums are returned to the beneficiary.

It is also important to understand that different cancer cases have different associated mortality rates, meaning that insurers might treat them differently. Some may consider skin cancer more or less risky than colon cancer or breast cancer, for example.

Our insurance brokers will provide you with guidance related to your particular case, and help you with free cancer life insurance quotes to give you an idea of costs and exclusions.

How to get life insurance with cancer?

Getting life insurance with cancer is not that different from getting life insurance without cancer. Think about cancer being a health pre-condition that can limit your insurance choices. An insurance company will ask:

        How far back is your cancer diagnosis?

        Have you been stable since then?

        What type of cancer do you have and what stage is it in?

        Do you have a family history of cancer?

        Do you have any complicating issues (e.g. obesity, diabetes, etc.)?

        Are you under active medical cancer treatment such as chemotherapy?

Based on this information, you will be offered one of the following:

1.      Traditional life Insurance (standard rates)

2.      Traditional rated life Insurance (increased rates to cover the risk)

3.      No medical life insurance: simplified issue (no medical exam, just a short questionnaire)

4.      No medical life insurance: guaranteed issue (no medical exam or questionnaire but you’ll have lower coverage limits, higher insurance costs, and a two-year waiting period)

Since various insurance companies treat cancer insurance differently, work with an experienced insurance broker to get multiple insurance quotes so you can get the best combination of price and coverage offered for your situation. Our insurance specialists work with about 30 Canadian life insurers and are happy to help you with a life insurance quote.

Where can I get life insurance if I have cancer?

Most Canadian life insurance companies provide life insurance for people with cancer. Life insurance coverage and policy costs can vary greatly. Two main products are called traditional (or standard) life insurance and no medical life insurance (simplified or guaranteed life insurance).

Traditional life insurance is cheaper than no medical life insurance (based on costs for the same coverage amount). Traditional life insurance offers coverages of up to $5,000,000 or more, but is typically available for those cancer situations where the diagnosis is far back (at least 5-10 years) and the policyholder’s health has been stable since then.

If the cancer has been diagnosed recently, such as under two years ago, your best chance at a successful application is no medical life insurance. Apply for simplified insurance if you can qualify for it by truthfully answering no to a handful of health-related questions, or guaranteed if you can only qualify without providing any sort of medical information. Brokers have access to various policies so they can let you know which simplified or guaranteed application is right for you.

Our insurance specialists can help you get a tailored cancer life insurance policy or simply inform your search.

What is cancer life insurance?

Its important to distinguish between cancer life insurance and cancer insurance, as these are entirely different products.

Cancer life insurance is a product that is specifically designed for people who have been diagnosed with cancer or are cancer survivors. It covers death from cancer but has higher premiums when compared to traditional (standard) life insurance.

Cancer insurance is a simplified version of critical illness insurance. It pays a lump sum if the life insured is diagnosed with cancer as described in the policy. The lump sum is tax free and can be used however the beneficiary wishes. This may be for a caregiver to take time off work, out of province treatment, bucket list trip, etc.

Our specialists will provide guidance for both products regarding the best coverage for your cancer situation. Contact us today to learn more about life insurance and cancer.