Buying Life Insurance after Cancer
More than 1.9 million new cases of cancer are expected to be diagnosed
in 2022 according to the American Cancer Society. It’s a chilling statistic.
However, there’s another statistic that offers encouragement. The
survival rate for all cancers has increased significantly over the past
several decades.
It’s also encouraging to know that it’s possible to get life insurance after
having cancer.
“With the many advances in cancer treatment and a long track record of
success in treating the disease, insurance companies are very open and
willing to insure people who previously had cancer,” says Ryan Pinney,
president of Pinney Insurance.
So don’t assume that a history of cancer will prevent you from buying life
insurance to protect your family’s financial security. Here’s what you
need to know about how cancer affects your ability to get coverage and
the rate you’ll pay.
How much does life insurance cost?
Policy length
How long your coverage lasts. Rule of thumb: Your term should last at
least until you retire, and should also cover your longest financial
obligation (like a child's college costs).
Coverage amount
The amount your loved ones would receive if anything should happen to
you before your policy expires. Rule of thumb: Most financial planners
recommend an amount 10-15x your current income.
Monthly estimates for
Life insurance rates are influenced by a number of factors, but your
health has the biggest impact on the final cost.
The Importance of Getting Life Insurance While You’re Healthy
The best time to buy life insurance is when you’re young and healthy.
That’s because your age and health are two key factors in determining
the rate you’ll pay for coverage.
“When you are younger and healthier, that means lower premiums,” says
Matthew Sweeney, a life and financial services specialist with Coverage,
Inc., an independent insurance agency in Virginia.
Securing a low rate isn’t the only benefit of buying life insurance sooner
rather than later. You’re much more likely to be able to get a high amount
of coverage at a good price. And your insurability will be guaranteed for
the entire term of your policy, Sweeney says. That means you won’t lose
your coverage nor will your rate increase if you develop a health condition
such as cancer.
How Cancer Affects Your Ability to Get Life Insurance
If you don’t think about buying life insurance until your health has taken a
turn for the worse, your insurability will be challenged.
“I pray for those who get a cancer diagnosis and want to scramble to take
care of their loved ones with life insurance because it is much tougher to
acquire affordable coverage at that point,” Sweeney says.
In fact, you likely won’t be able to get a traditional life insurance policy if
you’ve just been diagnosed with cancer or are receiving treatment, he says.
You’ll need to be cancer-free before you can apply for coverage.
You might be able to get a guaranteed issue life insurance policy. You can’t
be turned down for coverage as long as you meet the insurer’s age
requirements (the minimum age is typically between 40 and 50). But you’ll
have to pay a high cost for what you get, and coverage amounts are limited…
typically a maximum of $25,000 or less.
That could be enough, though, to cover final expenses such as funeral costs
or medical bills. Plus, you could buy a guaranteed issue policy to have at
least some coverage while undergoing treatment then apply for a term life or
permanent life insurance policy after you are cancer-free.
Also, guaranteed issue policies aren’t a surefire way to provide a death
benefit to your life insurance beneficiaries. If you pass away within the first
two or three years of owning the policy, your beneficiaries typically get only a
refund of the premiums you paid and some interest, not the face value of the
policy.
Getting Life Insurance after Cancer
Life insurance companies typically want to see that you’ve been cancer-free
for a certain number of years before they’ll consider insuring you. The number
of years depends on the type of cancer you had.
Some forms of cancer are considered less severe or life-threatening due to
high rates of successful
treatment, Pinney says. These types typically have
shorter waiting periods than more severe and complex cancers that can
often involve radiation, chemotherapy and even bone-marrow transplants.
“Generally, less-severe forms of cancer can have waiting periods of one to
three years after the date of last treatment,” Pinney says. “Other more severe
forms may be as long as five years.”
The waiting period also depends on the severity of the cancer you had at the
time of diagnosis. For example, a woman with breast cancer caught early…
in stage 1 or 2…is going to have a shorter waiting period for getting life
insurance than if she had stage 3 or 4 breast cancer, Pinney says.
Waiting periods can also vary from insurer to insurer. However, here’s a
sample of waiting periods for various types of cancer from the Trusted
choice network of independent insurance agents…
Bladder cancer – 2 years
Bone cancer – 5 years
Breast cancer – 2 years
Cervix cancer – 1 year
Colon cancer – 2 years
Kidney cancer – 3 years
Leukemia – 10 years
Lung cancer – 3 years
Lymphoma – 2 Years
Metastatic cancer – 5 Years
Ovary cancer – 3 Years
Prostate – 1 Year
Rectum cancer – 2 Years
Skin melanoma – 1 Year
How Cancer Affects Life Insurance Rates
Unfortunately, even if you can get life insurance after cancer, you likely
won’t qualify for the best rate, Pinney says. That’s because your history
of cancer now makes you a higher risk to insure.
When you apply for coverage, the insurance company will ask questions
about your current health, your medical history and your family’s medical
history. It also will check your medical records, prescription drug history,
driving record and other information to determine in which risk class you
belong. Your risk class will then be used, along with your age and gender,
to determine your life insurance rate.
Insurance companies typically use three general underwriting risk classes…
Standard – Most people fall into this class, which is the baseline for
insurance rates.
Preferred – The rate is lower than the standard rate, and you must be in
good health to qualify.
Super preferred – This is the lowest rate available, and you must be in
excellent health to qualify.
Those with serious medical conditions might not even qualify for the
standard risk class. Insurers will use a “table rating” system of letters or
numbers instead. An A or 1 rating typically costs 25% more than the
premium for the standard risk class, and rates go up as the table rating
increases from B, C, D, or 2, 3, 4 and so on.
Preferred rates are possible for cancer survivors, depending on the type
of cancer, severity and time since treatment was completed, Pinney says.
For example, some types of skin cancer have very little impact on life
insurance premiums. However, it’s more common to receive a standard
rating or table rating of 1/A to 4/D following cancer.
Increase Your Chances of Getting Life Insurance at a Lower Rate
A history of cancer will likely force you to pay more for life insurance than
you would have otherwise. But there are ways to keep down the cost of
coverage.
Improve your overall health
Use the waiting period you have to do everything you can to get in shape,
kick any bad habits you might have and get any other medical conditions
under control. Being in the best possible health will increase your chances
of getting a better rate.
Work with an independent life insurance agent or financial advisor
Independent agents work with several insurance companies and will know
which ones are more willing to insure cancer survivors. In particular, look for
an independent agent who specializes in impaired risk underwriting.
“These types of agents and firms have extensive knowledge and experience
in underwriting cancer and many other health conditions,” Pinney says.
“They can guide you through the shopping and underwriting process to
ensure you get the best product and pricing based on your particular needs.”
Cameron Huddleston
https://www.forbes.com/advisor/life-insurance/after-cancer/
Hayden Childs
Alabama Licensed Agent
(205) 269-1382
Offering AIG American General
Guaranteed Issue Whole Life
If you are between the ages of 50-80
Regardless of health you will not be
Turned down!
Available Coverage Amounts
$5,000 to $25,000
Budget-friendly premiums never
Increase as long as you own
The policy.
Contact Me Today!
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