Can a cancer patient get any life insurance?

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Editor’s note: The Insurance Adviser answers two similar questions from readers wondering about the availability of life insurance for loved ones battling cancer.

Dear Insurance Adviser,
I have a sister who has cancer. Her cancer is slow-growing, and while she has to have periodic chemotherapy treatments, she could live a very long time. She is 54 years old and does not have life insurance. Is it possible to get insurance on someone who has cancer?

Dear Insurance Adviser,
My wife and I are considering purchasing a new home. Unfortunately, she is currently undergoing treatment for a breast cancer recurrence.

I’m familiar with typical life insurance policies and realize our chances for coverage are slim. In the case of mortgage life insurance, I’m not sure if she would qualify. Even if we could get a policy, what are the chances it would pay out in the event her illness takes a turn for the worse?

Any guidance would be most helpful!
— Jim

Dear Barbara and Jim,
First, Barbara, there’s a saying about insurance: You can buy it only when you don’t need it. That’s generally true for all types of insurance, unless a federal or state law makes it mandatory that insurance companies accept everyone — as in the case of the Obamacare health insurance reform law. So your sister is now able to buy health insurance, regardless of her health conditions. However, no such law applies to life insurance.

She is 54 years old and may still be employed. Maybe she has access to voluntary group life insurance at work. If enough healthy people participate in voluntary group life insurance, insurance companies will often offer a certain amount of guaranteed coverage for all comers regardless of health. I encourage you to look into that.

You don’t mention why, at age 54, your sister needs life insurance. Maybe it’s to help her children with college costs. Or perhaps it’s to provide an ongoing income to her husband, or to pay off a mortgage. If she can’t qualify for life insurance, there are some steps she can take now that would ease the financial burden on her survivors. The steps might include setting up a trust or transferring homeownership to a trust or to her adult children. Updating her will and medical directives are musts.

And Jim, let me begin by telling you how sorry I am that you and your wife are about to go through another cancer battle. How disheartening that must be!

You asked about mortgage life insurance. It pays off a mortgage in the event of death. But today, most mortgage life insurers require a person to be able to qualify medically. It’s worth asking about anyway, though.

Find the best life insurance rates in your area.

As with Barbara’s sister, if your wife is still employed, she has whatever life insurance the employer provides to all its workers. If her health causes her to leave the job, make sure to turn that group life insurance policy into a conversion policy that requires no medical exam and offers level premiums for life.

Make sure that she acts immediately, since most conversion options are good for only 30 days. Sometimes, group life programs have annual open enrollment periods during which a certain amount of life insurance is available, regardless of health. If she has such an option, she should grab all the coverage she can get.

If you do succeed in obtaining your wife life insurance of any type, and the policy is issued, the insurer can contest making the payout only if she dies within the first two years and lied on her application. (The only other thing that could negate a claim during the first two years is if the insured person commits suicide.)

As long as she fully discloses existing health issues on the application, there should be no problem.

Jim and Barbara, I hope this is helpful.

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