Life insurance for cancer patients and survivors

If you are being treated for cancer, or you are in partial or complete remission, you may still be able to buy life insurance to protect your dependants.

Life insurance is designed to protect your dependants if you die before they can financially support themselves. While it might be harder for cancer patients and survivors to find a suitable life insurance policy, they do exist. 

Buying life insurance after you’ve had cancer, or if you’re being treated to it, depends on a few important factors. These include the type of cancer you have, how long you have had it for, and the severity of the cancer.

In the UK there are around 367,000 new cancer cases every year, which is equivalent to 1,000 a day, and every 2 minutes someone is diagnosed with cancer, according to Cancer Research UK. 

Here we explain exactly how life insurance works with cancer, how you can get life insurance after having it, and how to compare quotes to find the best policy for your circumstances in order to protect your family.

How to get life insurance with cancer  

Most insurers won’t sell a life insurance policy to anyone for at least 2 to 3 years after they have recovered from cancer, according to Cancer Research UK. 

If you are currently being treated for cancer, you’re also unlikely to be able to buy a new life insurance policy. However, it’s always worth checking with a few different insurers as these policies are sold on a case-by-case basis.

When you can buy a policy, the cost will be higher than most people pay, especially when the policy first starts. This is because the risk of most cancers returning goes down as the time that has passed since going into remission increases.  

The price you pay, and whether you can get a policy at all, will depend on the following factors:

  • The type of cancer you’ve had

  • How long you had cancer for

  • The grade and stage of the cancer

  • Any treatment you have received, or are receiving

  • The length of time you’ve been in remission

What kind of life insurance policy do you need?

Life insurance is designed to protect your family and dependants should the worst happen and you die while they are reliant upon you.

It’s something no one wants to think about or imagine but having a policy in place means your dependants will be given a lump sum of money to pay for costs such as housing, household, bills, and childcare. 

There are different types of life insurance policies to buy, and the kind you choose will depend on your own circumstances. For patients and survivors of cancer, the options become more limited, but some insurers do still provide policies.

The first thing to decide is what kind of policy you may need from the following, we have a full explanation in our life insurance explained feature.

When you buy this policy, it is set for a fixed term, such as 5, 10, 15, or 20 years. If you die within that period, it will pay out a lump sum which you have agreed upon.

This type of policy pays out a set amount of money when you die which you agree upon when you buy the policy.  

The lump sum paid out by an insurer with one of these policies decreases over time. They are usually designed to cover mortgage payments (although some policies can go towards other costs). 

This type of policy is generally more expensive and not as common. It has two options, you can take a policy with or without profits. If you take what’s called a ‘with profits’ policy, you get a share of the profits of the company, if there is one. This share is usually added to your policy each year as a bonus.  If you don’t take the profits, you don’t share in any of the profits made by the investment company and will instead just get the basic amount of cash you have been covered for if you die.

These insurance policies are unique because they don’t require medical underwriting so you won’t need to give an insurer any details about your medical history. If you die within two years of starting the plan, you won’t get the full cash payout but you may be given a refund of the premiums you’ve paid out. 

The overall lump sum is less than with other policies in which the monthly premium is higher.  You need to keep up with the monthly payments, otherwise it’s not possible to get the lump sum pay out when you die. 

What happens if I have a history of cancer in my family? 

When you buy a life insurance policy, you will need to tell the insurer all about your lifestyle and medical history. It’ll ask you a series of questions and from these it will decide the price you’ll pay for premiums, or even if it’ll sell you a policy at all.

Young, healthy adults with no history of illnesses like cancer will be quoted the cheapest premiums on average as the risk of them dying and the insurer having to pay out a claim will be low. While older adults who are unhealthy, or those of any age who are suffering from an illness like cancer, will be quoted a higher premium as the risk of the insurer having to fulfil the claim will be higher. 

If you have family members who have had cancer, there may be a higher risk of you also being diagnosed with it at some point. If this is the case you may want to invest in a life insurance policy, to make sure your family is protected if the worst were to happen.

It is possible to have what’s called ‘predictive genetic testing’ which can identify if you have the gene which increases your risk of cancer. If the test shows you do have a high incidence of cancer in your family, this means the premiums you pay for life insurance could be higher than the average cost.   

How can I buy a life insurance policy after having cancer?

The cost of insurance for both patients and survivors of cancer is usually a lot higher than the average cost for most people. This means it’s even more important to compare prices to make sure you’re not getting ripped off, and to find a policy which meets your needs and will provide enough cover to your dependants. 

When you buy the policy, the insurer will ask for your permission to contact your doctor, or the hospital where you were, or are, being treated for cancer. It may also request that you have a separate medical examination as well before it issues you the policy.

You could also speak to your doctor before you start comparing the price of insurance as they will be able to give you a rough idea of the kind of prices you might pay, or if you can buy a policy at all. 

By using a comparison website, or contacting a specialist broker, you can access a range of quotes from different insurers.  

If I already have a policy? Can I use it if I am diagnosed with cancer?

You may already have a life insurance policy in place. If this is the case, and you were honest about your medical condition and health when you signed up for it, you may be able to claim on it. Check the terms and conditions, and also look at the list of illnesses included within the policy.

Many policies provide cover if you’re given a terminal diagnosis. This means the insurance company will pay out a lump sum if you’re expected to live for 12 months or less, although the exact details will depend on the policy.

If you can’t find insurance, what are your options?

An insurer may also refuse to sell you a policy and buying one with an exclusion for a claim related to cancer is rare. If the price you’re being quoted is sky high, or you’re finding it hard to find insurance at all, the British Insurance Brokers’ Association has a free service to help you find a policy. 

How can I access a life insurance pay out early?  

If you are diagnosed with cancer and you already have a life insurance policy, it might be possible to cash it in, or sell it.

Choosing to do this does mean you could get some, or all, of the cash pay out from your insurer but it also means when you die your chosen beneficiaries won’t get any money.

What you can do will depend on your own circumstances, and the type of policy you have but the following options may be available. 

  • Terminal illness benefit

Some life insurance policies include a benefit if you are diagnosed with a terminal illness. Although all policies are different, on the whole this means if you are diagnosed with an illness such as cancer and are expected to live for 12 months or less, your insurer may pay out the full amount of the cash sum to you.

If you do then live for longer than the 12 months, you can still keep the money and you can use this for whatever you need it for.  

  • Cash in an insurance policy early

It might be possible to cash in a life insurance payout before you die in some circumstances. The benefit of doing this is that you will have the money and you and your dependants can then spend it however you need it. During this time, for example, if you’re unable to work and your income has dropped significantly, or disappeared completely, the money could be used to make up the shortfall. There may be a charge for doing this, and some policies will only pay the cash value of the policy out and not any premiums you have already paid. The terms of cashing in the money early will be listed in your policy details, and you may need to give details of your medical notes to the insurer to do so. 

  • Sell the policy

If you have an endowment policy, it might be possible to sell it to someone else in return for the lump sum of cash which would be paid out. In order to do this you’ll need to use a specialist company and the person buying the policy would agree to take on the premiums, and would get the money at the end of the policy.  

14th September 2020