Life Insurance and Cancer: What You Need to Know

According to Cancer Research UK, every two minutes someone in the UK is diagnosed with cancer. With this in mind, any one of us could be at risk of this devastating disease.

In addition to the physical and emotional toll, there may also be financial implications, including medical bills, travel costs to and from treatment and lost income from time away from work due to treatment and recovery.

For many, life insurance can provide peace of mind for themselves and their loved ones during difficult times. We'll look at how cancer can affect life insurance, and what options you have for buying cover.

Is cancer covered by life insurance?

A life insurance policy pays out a lump sum to your family or loved ones if you pass away - including from a terminal cancer. This money can be used to help your family stay financially secure during this difficult time.

Key takeaways

If you have/had cancer, you may find it harder to get life insurance now because of the following reasons:
 

• Your premiums may be expensive, as you are deemed a higher risk to insure.
   

• Some insurers won't cover people who have cancer.
   

• Your insurer may require you to undergo a medical exam.
   

• You may have to pay extra money for additional benefits.
   

• You may have to wait longer to receive payment.
   

• Certain types of cancer may make you ineligible for some life insurance products.

Getting life insurance before a cancer diagnosis

A life insurance policy pays out a cash lump sum in the event of your death. Your insurer may also issue a pay out your policy early if you are diagnosed with a terminal illness, such as cancer.

If you are diagnosed with cancer whilst covered by life insurance, your insurer should still honour your policy. However, this depends on whether you were honest about your health and family medical history. Failure to disclose the relevant information at the time of application could result in the policy being void and a claim getting declined.

A good rule of thumb is to answer the questions as openly, honestly and accurately as possible.

Getting life insurance after a cancer diagnosis

If you have been diagnosed with cancer, you may find getting life insurance harder than usual. This is because insurers are more likely to decline or postpone your application if you've ever had cancer.

They do this based on information they receive from your doctors. So, if you have been told that you have cancer, the insurer may decide to reject your application.

The reason why insurers make such decisions is simple: they want to protect themselves against potential claims. And since people who have previously had cancer may have a shorter life-span, the insurers consider it a higher risk.

If you had quite a mild form of cancer though, or it has been many years since your treatment ceased, you may find it easier to find cover, though you might end up paying an increased monthly premium for it.

You can apply for life insurance even if you have cancer. But you'll need to make sure that you're covered under your existing policy.

Certain policies catering to those with pre-existing medical conditions, such as guaranteed life insurance. These policies may come at a higher cost, but can provide valuable peace of mind for those needing protection.

Which type of cover should I buy?

When it comes to life insurance cover, there are several types of policies to consider. The right policy for you will depend on your circumstances, medical history, and budget.

Term life insurance

Term life insurance provides cover for a set period of time, such as 10, 20 or 30+ years. If you pass away during the term of the policy, your family will receive a payout. There are 3 types of term life cover:

• Level term - Your cover amount stays the same throughout the length of the policy. Your premiums are also fixed, meaning you'll still be covered even after you're diagnosed with some form of cancer.
   

• Increasing term - Unlike level term, the payout value of the policy increases over time. This intends to protect the value from inflation, so your loved ones receive the same amount of money in line with inflation. It’s important to note that your premium will also increase to reflect inflation and the new level of cover.
   

• Decreasing term - This level of cover is also known as mortgage life insurance. The payout of the policy decreases over time as you make repayments on your current mortgage. The premiums remain the same, but are generally cheaper than level term cover. 

Whole life insurance

Unlike a term policy,whole life insurance covers you permanently, as opposed to a set number of years. This means the policy pays out regardless of when you die.

You can purchase level term or an increasing policy for whole life insurance. With level term, your cover amount and premiums will stay the same. If you select increasing cover, your sum assured will increase with inflation as well as your premiums to reflect the new cover. 

Premiums for whole life insurance are often more expensive than other forms of cover, however, you are protected indefinitely. As your premiums are fixed, you won't have to worry about them increasing if you are ever diagnosed with cancer.

Depending on the level of cover, the total premiums you pay may exceed the cover amount, which is why it’s important you speak to an adviser about your options beforehand.

Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.

Critical illness cover                                  

Critical illness cover pays out a lump sum if you are diagnosed with a critical illness, such as cancer. This payout can be used to cover medical expenses, lost income, or any other expenses related to your illness. This type of cover is often sold as an add-on to life insurance policies. Adding on critical illness cover will usually increase your premiums as the plan will cover you for a variety of illnesses, including cancer, heart attacks and strokes.

Income protection

Income protection insurance provides regular payments to replace lost income if you are unable to work due to illness or injury. This can include cancer diagnosis and treatment. In doing so, it helps to prevent you and your family from falling into financial hardship during a difficult time.

How does cancer affect life insurance premiums?

If you have been diagnosed with cancer, it may affect your ability to get cover, or increase the cost of your premiums. Insurance providers typically consider several factors when determining premiums, including age, health status, lifestyle choices, and family medical history.

If you have a history of cancer, insurance providers may consider you a higher risk. In which case, they’ll require additional medical underwriting before offering cover.

This could result in higher premiums or exclusions for certain types of cancer, for example, breast cancer. However, it is important to shop around and compare providers, as some may have more lenient underwriting criteria than others.

When shopping around with any pre-existing medical condition, it may be best to speak to an adviser who has access to the whole market, so they can conduct research and help you find the best option available.

You can speak to one of our advisers on 01392 436 193 (Mon - Fri: 9am - 5.30pm)

What happens if I can't pay my premiums?

If you are unable to pay your premiums, there are usually a few options available.

For example, if you are struggling to pay your premiums because you’re currently off work ill, and your plan includes waiver of premium, your insurer will cover your premiums for you and you won’t lose the cover.

Alternatively, they may be able to grant you some sort of payment holiday or repayment plan.  

It’s important to speak to your insurer before making any decisions about your policy. They will be able to provide more information and advice on what options are available.

Do I need to tell my insurance provider about cancer?

You must inform your insurer about any pre-existing medical condition when applying for a policy. Failure to do so could lead to your application being rejected. If you don't disclose your cancer history, it may affect your claim.

If you've been diagnosed with cancer, you must let your insurer know. They may ask for further information, such as scans and reports.

Even if you have fully recovered from cancer, insurers still may consider it a pre-existing condition. In such cases, they may ask for additional medical underwriting before accepting you. This could involve a nurse screening or a report from your doctor. Learn more about underwriting.

You may also be required to undergo a health exam in order to determine if you are insurable. If you're unsure about your options or have any medical conditions, speak to one of our expert life insurance advisors. They can help you choose the right policy based on your circumstances.

Where to get advice?

If you're still unsure about whether you're eligible for life insurance, get in touch with our expert advisers. They'll be on hand to answer any questions you may have and help you find the right policy for your needs. Don’t leave anything to chance, get in touch today!