True life insurance policies (not AD&D) pay a benefit regardless of the cause of death. In some cases the policy will refund premiums vs. paying the face amount, especially if death occurs during the contestable period.
Suicide during the first 2 years the policy is in effect is a common situation where premiums paid will be refunded vs. paying the face amount.
Unless the policy was for accidental death only, it will cover death from cancer or any other illness. All true life insurance will.
Accidental death policies should not be considered part of your life insurance coverage. You should count them more along the lines of your lottery tickets. They only pay off in the rare event that you die of an accident.
The worst part of accidental policies are that they give people a false sense of security and prevent many people from ever getting around to buying the coverage they actually need.
Life insurance does cover death by cancer. However, it is common for someone diagnosed with cancer to seek out a life insurance policy, and at that point in time it is very difficult to obtain coverage. It generally takes at least a couple of years to obtain a medically underwritten policy after a cancer diagnosis, especially if over stage 2. Of course, it also depends on the type of cancer, treatment needed, and effectiveness of the treatment.
If a policy is issued, it generally is graded for 1-3 years, so that only a small amount is paid out if death occurs during that time. If the policyholder outlives the graded period. the policy pays the full face amount.
As with every health condition, it is best to get your life insurance before a serious diagnosis. But whereas some health conditions cause your rates to go up more the longer you have it, the good news with cancer is that the longer you are in remission, the lower your rates usually go. So get what you can, and then keep trying every few years to get something lower priced. You will find that there are life insurance agents rooting for you, and who will work hard to help you get the best rate possible.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Life insurance is designed by considering historical data that includes death by all causes. Once the issued policy has passed the incontestable period it pays a death benefit when a person dies. I have had two insureds murdered; the policies paid the death benefit. Cancer is a natural condition that is a part of the statistical basis for the policy and is therefore a covered cause of loss.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
Typically, yes. But let’s cover some of the “what if’s.”
What if you had no history of cancer, but then unfortunately come down with it after you take the policy?
You’re covered.
What if you had a history of cancer, but didn’t disclose it to the broker when you applied? Nor did you tell him or the examiner about any doctors who treated you?
That’s a big no-no. That’s insurance fraud. The carrier could contest the claim in the first two years. To tell you the truth, they might even come after you after that.
What if you just completed cancer treatment last year?
Carriers typically like to wait 2 to 5 years before making an offer. However, I have seen offers made sooner, under exceptional conditions.
What if you are a woman, and you have no history of breast cancer, but it runs in your family?
With all other things being equal, you could certainly be eligible for coverage now. But the family history might preclude you from getting the rock-bottom rates (sorry - blame the actuaries :)
What if you have an accident-only policy?
No coverage for illnesses such as cancer.
But what if you had cancer, but tragically the cause of death was a plane crash? Different story.
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Suicide during the first 2 years the policy is in effect is a common situation where premiums paid will be refunded vs. paying the face amount.
Accidental death policies should not be considered part of your life insurance coverage. You should count them more along the lines of your lottery tickets. They only pay off in the rare event that you die of an accident.
The worst part of accidental policies are that they give people a false sense of security and prevent many people from ever getting around to buying the coverage they actually need.
If a policy is issued, it generally is graded for 1-3 years, so that only a small amount is paid out if death occurs during that time. If the policyholder outlives the graded period. the policy pays the full face amount.
As with every health condition, it is best to get your life insurance before a serious diagnosis. But whereas some health conditions cause your rates to go up more the longer you have it, the good news with cancer is that the longer you are in remission, the lower your rates usually go. So get what you can, and then keep trying every few years to get something lower priced. You will find that there are life insurance agents rooting for you, and who will work hard to help you get the best rate possible.
What if you had no history of cancer, but then unfortunately come down with it after you take the policy?
You’re covered.
What if you had a history of cancer, but didn’t disclose it to the broker when you applied? Nor did you tell him or the examiner about any doctors who treated you?
That’s a big no-no. That’s insurance fraud. The carrier could contest the claim in the first two years. To tell you the truth, they might even come after you after that.
What if you just completed cancer treatment last year?
Carriers typically like to wait 2 to 5 years before making an offer. However, I have seen offers made sooner, under exceptional conditions.
What if you are a woman, and you have no history of breast cancer, but it runs in your family?
With all other things being equal, you could certainly be eligible for coverage now. But the family history might preclude you from getting the rock-bottom rates (sorry - blame the actuaries :)
What if you have an accident-only policy?
No coverage for illnesses such as cancer.
But what if you had cancer, but tragically the cause of death was a plane crash? Different story.