Last updated: 13/06/2023 | Estimated Reading Time: 13 minutes
One in two people will be diagnosed with cancer at some point in their lives. This is already a worrying statistic, but for many people, the thought of leaving their families in a poor financial situation if they pass away is another huge source of anxiety.
Taking out a life insurance policy can help alleviate this worry. Life insurance pays out a lump sum of money to your beneficiaries after your death, helping them cover essential expenses such as mortgage repayments, bills and funeral costs.
However, if you’re diagnosed with cancer, will you still be eligible for a life insurance policy? Can you keep the life cover you already have? Keep on reading to discover all you need to know about life insurance with cancer and life insurance for cancer survivors, including the types of life insurance you could get and other insurance policies that may be beneficial for you.
In This Guide:
- Will Life Insurance Cover Cancer?
- Can You Get Life Insurance if You Have Cancer?
- Life Insurance for Cancer Survivors
- Cancer Life Insurance: Best Types of Life Insurance
- Other Types of Insurance Policies for Cancer Patients and Survivors
- Life Insurance With Cancer: Finding the Right Insurance Policies
Will Life Insurance Cover Cancer?
The simple answer is yes. Cancer is actually one of the most common reasons for life insurance claims. If you already had life insurance before your cancer diagnosis, you should be covered by any regular policy and your family should receive the full payout if you die from the disease. Usually, insurance providers will cover all forms of death except for suicide in the first 12-24 months after the policy is taken out.
However, claims on your life insurance policy may be unsuccessful if the providers determine that you lied or omitted information about your health during the medical underwriting process. For example, if you claimed that you have no family history of cancer when you actually have a known genetic predisposition towards certain cancers, your policy may be invalid if you die from one of these types of cancer.
Do I Need to Tell Life Insurance About Cancer?
Overall, it’s important to be completely honest when answering medical questions from life insurance providers. You’ll need to disclose any pre-existing medical conditions (including previous cancer diagnoses) and provide honest information about your lifestyle. You should also definitely notify your provider when you receive a serious diagnosis like cancer, as not being honest with them could impact the validity of future claims.
You may struggle to increase the value of your policy if you have cancer. However, it’s always a good idea to stick with your policy and keep paying the premiums, as it could be very difficult for you to get a new life insurance policy or find affordable premiums as a cancer survivor.
Terminal Illness Cover
Your life insurance policy may include terminal illness cover, also known as terminal illness benefit. This means you can get your payout early (i.e., before your death) if you’re diagnosed with a terminal illness, such as terminal cancer, and have been told by a doctor that you have less than 12 months to live. Your insurance provider will ask for medical proof before approving an early payout.
You can keep this money even if you end up living for longer than 12 months. Having this money before your death can help you get your finances sorted and feel confident that your family is in a strong financial position.
Can You Get Life Insurance if You Have Cancer?
Unfortunately, if you don’t already have a life insurance policy before you’re diagnosed with cancer, you will find it very difficult to get life cover after a diagnosis, or it may even be impossible.
Since cancer is legally classed as a disability, you’ll be protected against discrimination from insurance companies under the Equality Act 2010. However, insurance providers are allowed to refuse to cover someone if they have legitimate evidence that your medical condition increases the risk of you making a claim. Therefore, if they have evidence from your doctor that you have a life-threatening cancer diagnosis, they can legally refuse to cover you.
You may also find it very difficult to get other types of insurance if these policies are related to your health. For example, travel insurance, health insurance and critical illness cover will be affected.
You should not be discriminated against when it comes to non-health-related insurance, such as home insurance and contents insurance. If you believe you are being treated unfairly, you can raise a complaint with the insurance provider or contact the Financial Ombudsman Service.
Life Insurance for Cancer Survivors
You may still find it difficult to get life insurance after cancer. Any life insurance policies you can get after your recovery may also come with much higher monthly premiums.
Generally, depending on the type of cancer you had, you will have to wait at least a year or two after complete remission or full recovery to be able to get a new life insurance policy. For more serious cancers, you could be waiting up to five years (or even longer in certain cases).
This is because your cancer is most likely to come back in the first few years after recovery. As your risk level decreases, many insurance providers will feel more confident about offering life cover, and as your risk level becomes similar to the rest of the population over time, your premiums will become less expensive.
During the medical underwriting process, which is where the insurance company asks you medical questions or asks you to undergo a medical examination before your insurance application is accepted, the insurance provider will want proof that you’ve had the all-clear from your doctor. At this stage, they will ask for your permission to speak to your doctor and look at your medical records.
They may also ask about your family history of cancer and whether you have a genetic predisposition to certain types of cancer, such as breast cancer, ovarian cancer, bowel cancer and prostate cancer. If you’re more at risk of developing certain cancers, insurance providers may offer a policy with exclusions for that type of cancer or higher monthly premiums.
Other factors that life insurance providers will investigate include:
- The type of cancer you had;
- The severity of your cancer diagnosis;
- The grade and stage of your cancer;
- How long you had cancer;
- Where your cancer spread;
- The treatment you had (e.g., chemotherapy, radiotherapy, surgery);
- When your last treatment was;
- When you last experienced symptoms;
- Whether you’re in remission/fully recovered.
Cancer Life Insurance: Best Types of Life Insurance
As a cancer patient or cancer survivor, having one of the following life insurance policies can ease your worries by giving your family financial protection. Remember that you’ll need to have an existing life insurance policy or wait a few years after your recovery before buying life insurance.
If you want guaranteed coverage for the rest of your life, then whole-of-life insurance is the best option. Unlike with term life insurance, you don’t have to die within a specific term in order for your beneficiaries to make a claim with this type of policy. Additionally, the payout itself is usually quite large, so your family could use it to cover a significant expense like a mortgage.
However, one downside is that the life insurance premiums will be higher for this type of policy because you have guaranteed coverage for the rest of your life. This makes it a big financial commitment.
Decreasing Term Life Insurance
With term life insurance, you’re only covered for the period of time specified within the policy, which is called the policy term. This is less convenient than whole-of-life insurance but your monthly premiums will likely be cheaper.
If your main concern is your mortgage, then decreasing term insurance may be right for you. The value of your payout decreases over time until it reaches zero, aligning with the remaining value of your mortgage. Because of this decreasing value, this type of policy is usually less expensive.
Increasing Term Life Insurance
On the other hand, with increasing term life insurance, the value of your payout increases over time. This is particularly useful if you’re worried about inflation eroding the value of your policy.
However, your monthly premiums will also increase over time, making this policy more expensive.
Over-50s Life Insurance
For many recovered cancer patients, an over-50s plan is the most accessible form of life insurance. Considering that most cancer patients are older, many survivors can take advantage of what an over-50s plan has to offer.
Perhaps the main benefit is that there’s no medical underwriting process, so you’ll be able to access guaranteed life cover and affordable premiums. This can take a lot of stress out of the search for new life insurance.
However, many over-50s plans won’t pay out if you die within the first couple of years, although your family may get your premiums back instead. Additionally, the payouts for over 50s life insurance are generally much smaller (usually up to £10,000), which means that if you live for a long time after buying the policy, you could end up paying in more than you get out of it.
Other Types of Insurance Policies for Cancer Patients and Survivors
Other types of insurance policies, particularly protection insurance policies, are extremely beneficial for those living with cancer or those with a medical history of cancer. Again, these policies will be hard or even impossible to get if you currently have cancer, so having them in place beforehand can give you peace of mind should the worst happen.
Critical Illness Cover
Critical illness cover offers you and your family financial protection if you can no longer work due to a long-term illness or injury. Some life insurance policies include critical illness cover as an add-on, so make sure you check the terms and conditions of any existing policies first.
When you secure critical illness cover, you’ll receive a lump sum cash payment if you can no longer work due to a particular illness or injury, which must be included in the list of conditions covered by the policy. If your specific type of cancer isn’t included in this list, you won’t be eligible to receive the payout.
If you’ve previously recovered from cancer, critical illness cover may only be attainable if your insurer excludes your previous cancer type from cover as a pre-existing medical condition. This is due to the higher risk of you developing this type of cancer again.
Please Note: Not all insurance providers we work with offer all types of policies. Please do your research and compare quotes before proceeding.
Income Protection Insurance
With critical illness cover, cancer patients can receive a lump sum payment to support themselves and their families. With income protection insurance, you can also get financial support if your illness prevents you from working, but you’ll receive regular monthly payments rather than a cash sum.
Income protection insurance will typically pay 50-70% of your regular income, and these payments will continue until you return to work or retire. Again, like with critical illness cover, your type of cancer will need to be included in the list of covered medical conditions.
One extra thing to note is that you’ll need to go through a waiting period or ‘deferred period’ before you start receiving payments, which means you’ll have to rely on your savings at first. The shortest deferred period option is usually 4 weeks, but you can set your deferred period at up to 12 months to take advantage of lower monthly premiums.
Mortgage Payment Protection Insurance
For many people, their mortgage is their biggest financial concern. This can cause huge problems if, for whatever reason (e.g., illness, unemployment, redundancy), they were suddenly unable to keep up with mortgage repayments.
Mortgage payment protection insurance (MPPI) will cover these repayments for up to 12-24 months if you’re off work due to long-term illness or unemployment, helping you keep your home if you’re facing difficult personal circumstances. You can get MPPI at any time if you have a mortgage, or your mortgage lender may offer to arrange this for you during the house-buying process. With the second option, you may be able to pay your premiums as part of your mortgage repayments, which will be much more convenient.
Payment Protection Insurance
Your mortgage isn’t the only thing you can cover with protection insurance. For other types of loans, such as personal loans and credit cards, you can get payment protection insurance (PPI). This insurance will cover your loan repayments if you’re unable to earn money due to unemployment or a serious illness, such as a cancer diagnosis.
One expense that you may not be prepared for is the cost of your funeral. Nowadays, the average funeral can cost around £4,000 in the UK, which could be a huge financial burden for your grieving family.
With a funeral plan, you can pay in instalments or pay a lump sum to a funeral provider so that all of your funeral costs are taken care of. Paying for your funeral in advance can also help you take advantage of current rates and avoid future price rises.
Waiver of Premium Benefit
A waiver of premium benefit is an optional add-on to standard life insurance cover. Usually, your life insurance policy will expire if you stop paying your monthly premiums, which means that your beneficiaries won’t be able to make a claim when you die. However, with this benefit, your life insurance will remain valid if you are unable to pay your premiums due to an injury or illness (e.g. cancer) rendering you unfit to work.
Your insurance provider will impose a waiting period (typically 3-9 months) before they start covering your payments following a claim. In addition, some insurers will pay out if you can no longer do your current job, but others may only pay out if you can’t perform any type of work. Your cover could continue until retirement age if you remain unable to work, but if you can return to your job, your monthly premiums will start again.
The waiver of premium benefit cannot be added to your life cover at a later date, so make sure you arrange this during your life insurance application process. There will be an additional cost for this cover.
Life Insurance With Cancer: Finding the Right Insurance Policies
A cancer diagnosis can cause a huge amount of stress and anxiety, no matter the prognosis. However, having a life insurance policy can alleviate some of these worries and give you confidence that you and your family will be financially protected.
Unfortunately, finding life insurance with cancer or life insurance after cancer can be very difficult. To guide you through this process, you should talk to an experienced insurance broker or use a comparison site to find life insurance quotes.
At Money Expert, we can show you a wide range of life insurance quotes so you can make comparisons and discover the right policy for you. We also offer plenty of fantastic information on life insurance to help you make the best financial decisions for you and your family.