Cancer has touched most people's’ lives in some way. Whether you yourself have been diagnosed with the disease or if you’ve had a family member or friend fight it, it has likely played some role in your life. It’s not surprising, then, that many of us are concerned whether our life insurance policies would pay out to our loved ones, were we to get sick and pass away from a cancer-related death.
Luckily, the answer to this question is usually yes. Most insurance policies today will indeed cover a death caused by cancer, so your loved ones will be financially protected after you’re gone. However, there are a few things to keep in mind.
Cancer is Usually Covered
You can rest easy that a cancer-related death will typically be covered by your life insurance company. Whether you have term or whole life coverage, you can rest easy knowing that your loved ones are likely protected if you were to pass away from cancer.
Cancer is considered a “natural cause” of death, which comprehensive life insurance policies, such as term life or whole life, cover. So no matter what type of cancer it is (such as breast or lung cancer), your family should be secure.
The main caveat with cancer-related term or whole life insurance is if you’ve misrepresented yourself on your insurance application. We’ll get to that in a minute, but just know that if you were entirely transparent in your application process, your family is financially secure.
(Source: The Washington Post)
If you hold an Accidental Death & Dismemberment (AD&D) policy rather than a comprehensive (term or whole life) policy, you may not have the same peace of mind. While these more affordable coverage options will protect your loved ones if you pass away due to an accident – and will protect you if you’re non-fatally dismembered in some way – they do not pay out for natural cause deaths such as a death from cancer. Cancer is not considered an accidental death.
As the name suggests, accidental death policies only pay out if you pass away from an accident of some kind. This means you can expect them to pay out your benefits if you die from:
- A car accident
- A fall
- Fire-related death
- An industrial accident
However, dying from old age, suicide, or cancer will not trigger a payout. If you want to ensure that your family is protected in case you pass away from cancer, you’ll need to look into a comprehensive term or whole life policy.
Being Dishonest on Your Application
If you’re dishonest throughout your life insurance application process, it could result in claim denial – even if your cause of death (cancer) is typically covered.
Let’s say, for instance, that you claim to have never smoked tobacco. A mere 18 months after buying your policy, you pass away from aggressive lung cancer. In this case, the insurance company will take a long, hard look at your past to see if you were being truthful. If they find out that you were a smoker for 20 years, who only quit a couple years back, your family will probably be left high and dry.
This is also the case if you were to lie on your application about your family history. Maybe you claim to have a clean bill of health in your family history, but you’ve in fact had three close relatives with breast cancer that you chose to purposefully withhold. If you then pass away from breast cancer and the insurance company finds out about your dishonesty, you can expect your family to get a big denial stamp.
In that same breath, you need to be aware of your insurance policy’s contestability period. Your family might not be left with their expected financial security if you mislead the insurance company about anything on your application, even if it has nothing to do with your death.
The contestability period is typically the first two years after buying your policy. If you pass away during this time, the insurance company reserves the right to investigate your family’s claim, delaying or even denying benefits in the end. During this contestability period, they will look into your death, your past, and often go through your application with a fine-toothed comb. If there are any inconsistencies – even if they had nothing at all to do with your death – your death benefits might be at risk.
This is why it’s incredibly important to be completely transparent in your application, no matter how uncomfortable it may be. The alternative is much worse: You could leave your family behind without the life insurance benefits they need.
Life Insurance After Cancer
If you’ve been diagnosed with cancer in the past, even if you’re in remission, getting life insurance as a cancer survivor is more difficult but still possible.
Depending on the cancer you had, your current health, and how long you’ve been in remission, you may be able to get term or whole life coverage. You can expect to pay more for premiums than if you hadn’t been diagnosed with cancer in the past, but it might still be an option.
If you currently have cancer, you may not be able to purchase a typical comprehensive policy right away. However, you have the option of buying a graded death benefit policy. In a graded death policy, the payout is lower if death should occur in the first few years after you’ve purchased a policy. This guaranteed product offers coverage in low amounts (usually up to $25,000), to cover things such as final expenses and any small debt you may leave behind.
Graded death policies typically include a two-year waiting period. This means that your loved ones will only get the full benefit if you pass away after that two-year wait has been met.
Protecting Against Cancer
If you’re concerned about getting sick and providing for your loved ones, now is the time to plan. By buying comprehensive, term or whole life, insurance plan, you will ensure benefits will be paid out if you pass away due to a natural cause, such as cancer.
The key is to buy before you need it, while you’re still young and healthy. That way, you’ll get more coverage for less, and rest easy knowing your family is protected.
You also want to make sure that you’re entirely forthright throughout your life insurance application process. Inaccuracies in your questionnaire can result in a denied claim for your loved ones, even if you pass away from a cause that would otherwise be covered. Answer questions as truthfully and completely as possible, so you can have a peace of mind.
If you still have questions about the type of life insurance to buy, and whether a particular type of death would be covered, give Leap Life a call at (844) 755-5327. Our life insurance agents are licensed, knowledgeable, and ready to help walk you through your options.
Cancer probably isn’t your only concern when buying life insurance, but it’s a big one. Luckily, with the right policy and coverage, your family will be protected should the worst happen. Get matched instantly with a policy perfectly fit to your needs, health history, and financial situation.