- Life Insurance and Cancer: Introduction
- Does Life Insurance Cover Cancer?
- Can You Get Life Insurance with Cancer?
- Different Types of Life Insurance Explained
- What Is the Difference Between Life Insurance and “Cancer Insurance?”
- No Medical Life Insurance and Cancer: Rates
- Getting Life Insurance with Cancer
Life Insurance and Cancer: Introduction
Cancer is a complex and devastating disease that occurs when abnormal cells in the body grow out of control and invade surrounding tissues. These cells can spread to other parts of the body through the bloodstream or lymphatic system, leading to the development of secondary tumors.
Cancer can affect anyone, regardless of age, gender, or lifestyle. It can be difficult to detect in its early stages, and there are often no symptoms until the cancer has already progressed. Moreover, cancer can have a significant impact on a person’s emotional and mental well-being, as well as their quality of life. It can lead to feelings of fear, anxiety, depression, and social isolation, making it a challenging disease to cope with for both patients and their loved ones.
According to the Canadian Cancer Society, 2 in 5 Canadians are expected to be diagnosed with cancer in their lifetime and 1 in 4 Canadians are expected to die of the disease. The latest estimates from 2022 suggest that annually, 233,900 people in Canada will be diagnosed with cancer and 85,100 cancer-related deaths are expected. The most commonly diagnosed cancers are projected to be prostate, breast, and colorectal cancers.
Life insurance underwriters view applicants that have or have had cancer with a holistic approach. They take into account the stage of cancer, the type of cancer, and the applicant’s overall health when determining risk. Canadian life insurance companies generally consider an applicant to be high risk if they have certain types of cancer, or if the cancer has not been in remission for a significant period of time.
When applying for life insurance with cancer, it is important to be honest about your medical history. If you are caught lying during the application process, the insurance company can immediately decline coverage. Thankfully, there are options to get life insurance if you have or have had cancer. Premiums and coverage specifics differ from case to case.
Let’s dive in and learn more.
Does Life Insurance Cover Cancer?
Life insurance coverage for newly diagnosed cancer depends on whether you provided accurate information about your health when you applied for the policy. If you disclosed your cancer diagnosis or survivor status and the policy was issued, your coverage will remain intact. However, if you provided misleading information to your insurer, such as concealing your cancer diagnosis, your insurance provider may deny coverage or claims.
It’s important to note that the type of life insurance policy you choose can also affect your coverage options. Traditional life insurance policies require a detailed medical questionnaire, including questions related to cancer. Simplified issue life insurance policies only have one or two questions related to cancer risk, while guaranteed issue life insurance policies do not have a medical questionnaire. However, guaranteed issue policies come with a two-year waiting period before coverage begins. If you have a positive cancer prognosis and don’t expect to pass away within two years, guaranteed issue life insurance may be a good option. But, if you do pass away within that waiting period, the claim won’t be paid – although your beneficiary will receive the premiums you paid.
Can You Get Life Insurance with Cancer?
There are different life insurance policies available for individuals with cancer. Some policies are best suited for less serious cases, such as earlier cancer stages or stable situations, while others are better for more severe situations, such as recent treatments or unstable health conditions resulting from cancer. Each case is assessed on an individual basis and the outcomes will vary.
Very broadly speaking, applicants can expect the following.
- Cancer diagnosis more than 10 years ago and you have been stable since then: You have a good chance of receiving traditional life insurance and getting standard rates.
- Cancer diagnosis 5-10 years ago and you have been stable since then: You have a good chance of getting traditional life insurance but with a rated policy (higher insurance rate).
- Cancer diagnosis 2-5 years ago and you have been stable since then: You might be able to apply for rated traditional or simplified life insurance.
- Cancer diagnosis less than 2 years ago: You can apply for a simplified or guaranteed life insurance policy.
It’s important to note that different types of cancer have different associated mortality rates, which insurers take into account when assessing risk. For example, skin cancer may be considered less risky than colon or breast cancer. To obtain guidance on your specific case and get free quotes, reach out to our insurance brokers who will help you navigate the available options.
Different Types of Life Insurance Explained
As seen above, there are options available. However, what do standard, simplified, and guaranteed issue really mean?
- Standard or traditional life insurance is the most common type of policy. It requires an extensive application process, including medical exams and lifestyle questions. The premiums are based on the applicant’s age, health, lifestyle, and other factors. This type of policy offers the most coverage at competitive rates.
- Rated life insurance is a type of policy that is offered to those who have been declined for standard life insurance due to health or lifestyle issues. The premiums for this type of policy are higher than standard policies as they take into account any potential risks associated with the applicant’s health or lifestyle.
- Simplified issue life insurance does not require a medical exam but does require applicants to answer some medical questions about their health history. This type of policy typically has lower coverage amounts than standard policies but can be more affordable for those who may not qualify for traditional policies due to their health or lifestyle.
- Guaranteed issue life insurance does not require any medical exams or questions about the applicant’s health history and is typically available for those over age 50. However, this type of policy usually has very low coverage amounts and high premiums compared to other types of policies.
What Is the Difference Between Life Insurance and “Cancer Insurance?”
It’s important to understand the difference between cancer life insurance and cancer insurance, as these are two separate products.
Cancer insurance is a simplified version of critical illness insurance that pays a lump sum if the life insured is diagnosed with cancer as outlined in the policy. The lump sum is tax-free and can be used at the beneficiary’s discretion, such as for caregiver expenses, out-of-province treatment, or a bucket list trip.
No Medical Life Insurance and Cancer: Rates
Life insurance premiums vary widely among insurers and are dependent on a variety of factors, from the applicant’s health to the underwriting guidelines of the insurance company. The following examples show the typical range:
- A 35-year-old non-smoker male applying for simplified issue insurance, $500,000 in coverage, can expect to pay between $72-$192 monthly.
- A 40-year-old non-smoker male applying for guaranteed issue insurance, $30,000 in coverage, can expect to pay around $67 monthly.
Note that in some cases, guaranteed issue insurance has a minimum age limit, and it always has a maximum coverage cap that is lower than traditional or simplified issue insurance. Guaranteed issue also will not pay out for death from illness during the first two policy years. If the insured passes away during that time, the premiums are returned to the beneficiary.
Talk to a broker for assistance in navigating no medical life insurance. The broker will preview the applications and match you with the best policy within your budget.
Getting Life Insurance with Cancer
Canadian life insurance companies offer coverage for individuals with cancer; however, the coverage and costs of policies can vary significantly. Two primary types of life insurance are traditional (or standard) and no medical life insurance (simplified or guaranteed). Traditional life insurance is less expensive than no medical life insurance, but it’s typically only available for those who were diagnosed with cancer at least 5-10 years ago and have had stable health since then. The coverage amount can be up to $5,000,000 or more.
If you’ve been diagnosed with cancer recently, your best option is no medical life insurance. Simplified insurance is an option if you’re able to honestly answer “no” to a few health-related questions, while guaranteed insurance is available if you’re unable to provide any medical information. Insurance brokers have access to a variety of policies and can help you determine which simplified or guaranteed application is right for your needs.
Our insurance specialists can assist you in obtaining a customized cancer life insurance policy or provide guidance during your search.