Does life insurance pay if you die from cancer?
- 1 Does life insurance pay if you die from cancer?
- 2 Are there any exceptions?
- 3 I had cancer before; can I apply for life insurance if I am in remission?
- 4 As a cancer survivor, how can I improve my chances of getting cover?
- 5 I got cancer after I took out life insurance, do I have to disclose this?
- 6 I don’t have cancer yet; what do I do?
- 7 What are my other options?
- 8 In the end
- Life insurance will pay if you die from cancer if: your policy covers natural causes of death, it is a life cover plan (not an Accidental Death Policy), and you fully disclosed any cancer-related health information on your life insurance application.
- Exceptions to this rule include: if your life insurance policy does not cover natural causes of death, and if you were dishonest about your health information during your application. Review your life insurance policy to ensure it is not an Accidental Death Policy.
- You can still apply for life insurance if you were previously diagnosed with cancer, or if you are currently a cancer patient.
Cancer is among the top ten leading causes of death in Australia. Statistics from Cancer Council Australia predict that 1 in 2 men and women in Australia will be diagnosed with cancer before the age of 85. Thus, the likelihood of you or someone you love getting it is high.
Given this, cancer can be a major concern when shopping for life insurance, raising questions such as whether you will be able to apply for life insurance after being diagnosed with cancer, or whether life insurance will actually pay benefits to your family if you die from cancer.
We’ll answer these questions and more in this guide.
Does life insurance pay if you die from cancer?
We’ll get straight to the point – generally, yes, life insurance will pay if you die from cancer, provided two conditions are met:
- Your policy covers natural causes of death. Comprehensive policies such as term life insurance typically cover natural and accidental causes of death. Cancer of all types counts as a natural cause of death.
- You fully disclosed any health information related to cancer on your life insurance application. You must disclose any relevant information to your provider, such as history of cancer in your family, or whether you were previously assessed by a doctor for cancer-related symptoms (even if you weren’t diagnosed at the time).
In sum, as long as your policy covers natural causes of death and you were truthful during your application, your life insurance provider should pay your death benefit to your listed beneficiaries in the event of your death from cancer.
Are there any exceptions?
The issue gets tricky when either of the two conditions are not met.
First, if your policy does not cover deaths from natural causes – such as in the case of accidental death cover – then your family will not receive benefits if you die from cancer or other illnesses.
Second, if you were not truthful or transparent about health information related to cancer in your application for life insurance then you passed away from cancer, this will raise a red flag for your insurance provider. If they run an investigation and find that you were dishonest on your application, this could result in a denial of your payouts even if cancer is covered by your policy. Here are some examples:
- You told your insurance provider that you only enjoy the occasional alcoholic drink, then you die of liver cancer and heavy alcohol consumption was found to be the cause. Your insurance provider could deny your family’s benefit claims.
- You stated that you have never had any cancer-related symptoms, but in reality you had a breast lump in your youth. If you eventually die of breast cancer and your insurance provider discovers the records related to the breast lump, this could result in claim denial as well.
- You intentionally did not disclose that cancer runs in your family and you eventually pass away from it. If your insurance provider discovers proof that cancer is in your family’s medical history, your claim could be denied.
I had cancer before; can I apply for life insurance if I am in remission?
Cancer Council Australia states that 69% of cancer patients will survive beyond five years after their diagnosis. This rise in survival rate means there are a fair number of cancer survivors making proactive choices for their families by seeking life insurance.
If you are a cancer survivor applying for life insurance, you may be asked about:
- What type of cancer you had, in what stage
- Where the tumor was located, how big it was, and whether it had any metastases
- When you were diagnosed
- What treatments and medications you underwent
- What medications you are still on now, if any
- How long you have been in remission
- Whether there have been any relapses or comorbidities
- Any family history of cancer
- Other health information – your current health status, whether you’re a smoker or drinker, weight and BMI, age and gender, etc.
Once you’re ready to apply for life insurance, you will likely be asked to present the following:
- Medical records starting from your first histopathology report confirming cancer to the most recent report, and all treatment records in between
- Records of your follow-up appointments, therapy sessions, etc. attesting to your adherence to your oncologist’s treatment regimen
Having a complete set of your records at hand and cooperating with application requirements can increase your chances of being approved for life insurance.
In the unfortunate event that you feel you have been discriminated against in your application for life insurance cover, here’s what you can do:
- Take it up with the anti-discrimination body in your state
- Lodge a complaint with the Australian Human Rights Commission or the Australian Financial Complaints Authority
- Seek a lawyer’s advice
As a cancer survivor, how can I improve my chances of getting cover?
You can improve your chances of getting cover by:
- Collating all your medical records – histopathology reports, all medical records during your time with cancer, and records of ongoing treatment plans. The idea is to arm your insurance provider with as much information about you as possible in order for them to carry out a thorough assessment. The more they know about your health status, the more likely your application will be approved.
- Getting a letter from your doctor communicating the above information. This will help your insurance provider interpret the records you’re presenting.
- Sticking to your treatment regimen. Attending your follow-up appointments and filling your prescriptions on time can reduce risk in the eyes of your insurance provider.
I got cancer after I took out life insurance, do I have to disclose this?
Unless it is specifically stated in your insurance policy, you do not typically have to run to the phone to inform your life insurance provider about a new cancer diagnosis or a positive genetic test result.
However, if you are going to renew your policy or make changes to your level of cover, you will have to disclose your new diagnosis or your positive genetic test result. This will be considered in their risk assessment and calculations of your new premium.
Failing to disclose a cancer diagnosis or positive genetic test result during renewing or changing cover may be grounds for claim denial if you die from cancer.
I don’t have cancer yet; what do I do?
If you have never been diagnosed with cancer, it may be easier for you to apply for life insurance and you will likely be charged lower premiums as well. If you can get life insurance now, get your foot in the door while you’re young and have a clean bill of health.
You might also need to disclose any results of genetic tests to your insurance provider when you apply for life insurance. A positive genetic test result may mean that you’re more likely to get cancer, and can result in increased premiums. A negative test result means that you’re only just as likely to get cancer as anyone else, and should not cause your premiums to rise.
Failing to disclose a positive genetic result during application for life insurance cover cover may be grounds for claim denial if you die from cancer.
What are my other options?
On top of life insurance, you could also consider critical illness insurance. When you are covered by critical illness insurance, you may receive a lump sum payout if you are diagnosed with a serious illness such as cancer.
Critical illness cover can help with medical bills and everyday expenses, and compensate for loss of income. It may also offer optional benefits for an additional fee; such as family benefits for family members who will take time off work to look after you, or accommodation benefits for when you need to travel to get treatment.
The important thing when it comes to critical illness insurance to check your provider’s definition of your type of cancer. You may not be able to claim benefits if your condition does not meet your insurance provider’s criteria for the illness.
In the end
If your life has been affected by cancer and you’re thinking ahead for your loved ones, taking out life insurance is a solid step to protect your family’s future. To increase your chances of getting cover, it is necessary to disclose complete and true medical information to your chosen provider.
Remember to shop around for life cover before you buy. Competition among insurers means that you may be able to find a lower price when you compare cover.
Use our comparison tool to get a quick quote for life cover. It only takes a few minutes to get a quote, and our expert advisers can help answer any questions you might have.
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