Life Insurance for Cancer Patients

A cancer diagnosis can turn your life upside down. Whether you have a current diagnosis or you’re a survivor, cancer can impact your life insurance options. Here’s everything you need to know about life insurance for cancer patients. 

Ready to start contacting companies for quotes? Here are the best life insurance companies for cancer patients: 

1. United Home Life 

United Home Life offers a range of whole life policies with no medical exams. It has 4 simplified issue policies and 1 guaranteed issue policy. Simplified issue policies have a limited number of yes or no questions. Its guaranteed issue policy has a limited benefit for the first 2 policy years.

In the event of accidental death, it pays the full death benefit during the first 2 years. All of these policies are issued quickly, which means you don’t have to wait a long time to find out whether you were approved. 

2. AIG Direct 

AIG Direct offers a simple, guaranteed issue whole life policy for those age 50–85. Its life insurance for seniors goes up to $25,000, which is high for a guaranteed issue product. It does have a limited benefit during the first 2 years. Natural deaths during the first 2 years result in a return of 110% to 120% of the premiums. Accidental deaths receive the full face amount.

AIG Direct also provides living benefits. Those who need help with 2 or more activities of daily living can access some of their benefits while living. Those with a terminal illness can also receive 50% of the death benefit while living. 

3. Mutual of Omaha 

Mutual of Omaha offers a range of policies, including a guaranteed issue whole life policy. This policy offers up to $25,000 in death benefits. As with other guaranteed issue policies, the benefits are limited for the first 2 years unless there is accidental death.

What makes this policy unique is that it offers access to a concierge funeral planning service. The service is available 24/7 to help you or your family plan for final expenses. 

4. Colonial Penn 

Colonial Penn offers term and whole life policies, including a guaranteed issue life policy. Its plans start as low as $10 per month. None of its plans require a medical exam.

Its guaranteed issue whole life policy has a lower benefit during the first 2 years. You can access your policy information and pay premiums online. You also have 30 days to review your Colonial Penn policy and return it for a refund. 

What is Life Insurance?

Life insurance is a policy that pays a monetary benefit if you die while the policy is in force. Life insurance payouts vary and can range from a few thousand dollars to millions.

How Does Life Insurance Work?

Many people get life insurance through their employers. You can also buy life insurance policies on your own. You can even buy life insurance that covers another person, but you must have an insurable interest in the person to do that.  

Insurable interest means that a person’s death would financially impact you. Spouses have an insurable interest in each other. When you get a life insurance policy, you designate one or more beneficiaries. Your beneficiary is the person or entity receiving the death benefit. A beneficiary can be:

• One or more people
• The trustee of a trust
• A charity or religious organization
• Your estate

You can name primary and contingent beneficiaries. Your primary beneficiary (or beneficiaries) are the first in line to receive benefits. If you name multiple primary beneficiaries, you can also note the percentage of benefits that each person or entity will receive. For example, you might leave 50% of your policy to your spouse and 50% to a charity. It’s up to you. 

If the insurance company can’t find your primary beneficiaries, then your contingent beneficiaries receive the benefit. Contingent beneficiaries serve as “back-up” beneficiaries.  

How Much Life Insurance Do You Need?

There is no set amount of life insurance that everyone needs. It depends on your situation. Your life insurance needs also vary over your lifetime. If you have young children and you have a mortgage, you might want to purchase enough life insurance to pay off the mortgage and pay for child care. Later in your life, you might only want enough to cover final expenses. 

Some things to keep in mind when deciding how much life insurance to purchase include:

• Do your loved ones depend on you financially?
• What expenses would your loved ones need to meet?
• Do you have a mortgage that you’d like paid off?
• Do you want to leave money to help with college expenses for your children or grandchildren?
• Do you want to leave something to a nonprofit you support?

If you have life insurance through an employer, you may want to keep that in mind when you decide how much to purchase. 

Cancer and Life Insurance

Cancer can make it more difficult to obtain life insurance, but it’s not impossible. This is because insurance companies look at life expectancy. If an insurance company views someone as a higher risk that person may be charged more in premiums or declined for coverage. A current cancer diagnosis or a recent history of cancer makes you a higher risk for life insurance. 

This doesn’t mean you can’t get life insurance, though. You might not be able to get as much as you’d like, and you might need to pay more for that coverage, but you can get a policy. One of the reasons for this is that policies have a contestability period. 

A contestability period is the first 1 or 2 years a policy is in force. The exact time frame varies by state and by the insurance company, but it will say it in your life insurance policy. During the contestability period, insurance companies have the right to investigate the death of the person insured by the policy. This is to prevent fraud. Unfortunately, people sometimes don’t include relevant information when they apply for life insurance. 

This is why it’s important to be upfront about your diagnosis and treatment on your application. When an insurance company finds that someone left important information out when applying for insurance, it can deny the claim. In this case, instead of receiving the full benefit, the insurance company will usually refund the premiums paid for the policy. 

If you’re applying for a policy that requires you to answer medical questions, be prepared to disclose information about your cancer. The insurance company will want to know information like:

• What type of cancer did you have?
• When were you diagnosed?
• What stage of cancer did you have?
• How was it treated?
• What is your status currently?

If you have cancer right now, your best bet might be a guaranteed issue or no medical exam policy. These policies usually have limited face amounts of $50,000 or less. You also might pay more in premiums. These policies might also have limited benefits for the first years you own the policy. 

Life Insurance Premiums

Life insurance companies look at several factors to decide on your premiums. These factors include:

• Your age: Life insurance costs more if you’re older because you have a shorter life expectancy. 
• Your hobbies: If you like skydiving for fun, insurance companies will see you as a higher risk and charge higher premiums. 
• Your health: A cancer diagnosis may result in higher premiums. Other health issues will also impact your premiums, including diabetes and high blood pressure. 
• Where you live: Life expectancies vary based on where you live. Insurance companies keep track of this information and it may impact your premium. 

Based on your lifestyle, age, gender and health, your life insurance company will decide how much to charge you. Insurance companies place applicants into categories and set rates for each category. Typical categories include:

• Preferred: These people get the lowest rates. They typically are in excellent health and have a low-risk lifestyle. 
• Standard: This is the “average” category. People in this category are in good health, but it might not be perfect. 
• Substandard: This category is for those who are a higher risk. Insurance companies may have several categories of substandard (sometimes called table ratings). Each category will have higher premiums. 

Every insurance company determines its own rates and categories. As with any purchase, the best approach to finding cheap life insurance is to get quotes from several companies to determine the best fit for your needs. 

Whole Life Vs. Term Life Insurance for Cancer Patients

The 2 most popular types of life insurance are whole life and term life. 

• Whole life: Whole life insurance is designed to be in force for your lifetime. It always has the same premium and the same benefit amount. It also builds up cash value. This is a fund that you can borrow against. If you decide you no longer want the policy, you can surrender the policy and you will receive the cash value. Let’s say you took out a $25,000 whole life policy at age 25 for $50 per month. You decide at age 40 that you no longer want the policy. You tell the insurance company you want to surrender the policy. The policy has $5,000 in cash value. The insurance company sends you a check for your $5,000 and you no longer have that coverage. 
• Term life: Term life insurance has no cash value. The policy is in force for the term you choose, which could be 5 or 10 years or longer. Let’s say you have a 15-year mortgage. You might purchase a 15-year term policy to pay off the mortgage balance if something happened to you. Term insurance is less expensive than whole life insurance. Some term policies are renewable. This means you can renew the policy after the term ends if you pay a higher premium.

You can own both types of policies, or just one or the other. It’s up to you. 

Choosing the Right Life Insurance for Cancer

Choosing the right policy takes time. Contact multiple companies and review your options. Choose the one that fits your needs and your budget.