Navigating life insurance options after a cancer diagnosis can be a daunting task, not only due to the emotional and physical challenges but also because of the financial implications involved. In 2021, an estimated 1.9 million Americans will receive a cancer diagnosis. Among these, breast cancer is the most commonly diagnosed type, while lung cancer remains the deadliest. Despite this grim statistic, the survival rates for cancer patients have significantly improved thanks to advancements in medical research over the past two decades.
For those diagnosed with cancer, understanding the impact on life insurance is crucial. This guide provides insights into how cancer affects existing life insurance policies, the possibilities of obtaining new coverage during treatment, options after entering remission, and solutions if premium payments become unmanageable.
Does Life Insurance Cover Cancer?
Most traditional life insurance policies will pay out the death benefit if the insured dies due to cancer, provided the policy was in force before the diagnosis. Exceptions include policies limited to accidental death and dismemberment, which do not cover deaths from illnesses. Another critical factor is the honesty of the application process; any omission or false information regarding one’s health can lead to denied claims.
Policies like guaranteed-issue or no-exam insurance often come with waiting periods or graded benefits, which could affect the payout timeline and amount.
Can You Obtain Life Insurance If Diagnosed with Cancer?
Securing life insurance post-diagnosis is challenging but possible. Here are some options:
- Guaranteed-Issue Life Insurance: This type does not require a medical exam but typically offers smaller death benefits intended for burial costs. These policies usually include a waiting period.
- Group Life Insurance: Often available through employers or associations, this insurance generally does not require a medical exam for basic coverage levels.
- Self-Insurance: For those with a prognosis of less than two years, saving the equivalent of premium payments might be more beneficial than purchasing a new policy with a waiting period.
Life Insurance After Cancer
Once cancer is in remission, more insurance options become available, albeit at higher premium rates due to the medical history. The type and severity of cancer previously diagnosed can affect this, with more serious conditions limiting options to high-risk or guaranteed-issue policies.
Family History of Cancer and Life Insurance
A family history of cancer can increase premiums and the likelihood of denial for life insurance. Insurers consider the type of cancer, the age at diagnosis of family members, and the relationship to the applicant. Shopping around is key as underwriting criteria vary by insurer.
Managing Life Insurance Costs After a Cancer Diagnosis
For those struggling with premiums post-diagnosis, a life or viatical settlement offers a potential solution, turning a burdensome policy into immediate cash. Life settlements are suitable for those with longer life expectancies, while viatical settlements are geared towards those with a prognosis of less than two years. Both options typically yield significantly higher payouts than surrendering a policy.
Navigating life insurance following a cancer diagnosis involves understanding the nuances of your policy and exploring all available options. Consulting with professionals like those at Harbor Life Settlements can provide clarity and facilitate the best financial decisions during a challenging time
