It's possible to buy life insurance after breast cancer, but breast cancer survivors face restrictions and high costs.
The long-term chances of beating breast cancer have increased for nearly four decades, and the 15-year survival rate for breast cancer is about 78 percent, according to data from the American Cancer Society.
Learn how breast cancer survivors can best approach purchasing life insurance.
Underwriting factors companies consider
If you're a breast cancer survivor, it's possible to get life insurance, but it's also common to be rejected before getting approved for a policy you can afford.
Not every life insurance company has the same set of underwriting requirements. If you've been rejected, keep contacting insurers. Ask about the insurer's approval conditions first, and be honest about the state of your cancer and the treatment you received.
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Getting approval depends largely on four factors, according to Chris Huntley, director of marketing at JRC Insurance, a San Diego-based agency that specializes in life insurance coverage.
- Stage and grade of the cancer.
- Type of treatment.
- Current treatment.
- Prognosis for the cancer.
Life insurance requirements
To be considered for life insurance, you must have gone through a full treatment program and the cancer must be in remission, says Huntley. But even then, expect more scrutiny -- insurance companies go over an extensive checklist before they insure you.
Here are some of the questions you can expect to answer during the application process:
- How long have you been cancer-free?
- When was the cancer diagnosed?
- What stage was the cancer?
- How large was the tumor?
- Did the cancer spread?
- When was the last treatment, and what type of treatment was it?
- Have there been signs of recurrence?
Typically, you will need to be in remission for a certain number of years before insurance companies will cover you. If you had stage 2 breast cancer, for example, you will have to wait about three to five years before getting coverage. If you had stage 4 breast cancer, the waiting period is usually 10 years.
Life insurance costs
Once you get approved, you'll still need to consider the cost of the policy.
"If your treatment has been successful, you could be eligible for a standard rate or less depending on your individual circumstances," Huntley says. Even if you're approved for a standard rate, you'll still pay more than someone who has not had cancer.
The increased cost comes in the form of a flat annual rate on top of your standard rate. This flat rate is additional protection for the insurance company. Depending on your answers to the questions in the checklist, that flat rate could be anywhere from $5 to $15 for every $1,000 of coverage, according to LPL Financial, an organization of independent financial advisers.
So, if you're a 50-year-old breast cancer survivor, you may pay an additional $2,500 to $7,500 more per year on a $500,000 policy. That's affordable for some people, but not for everyone. Many breast cancer survivors need to seek life insurance with a smaller death benefit.
Graded benefit life insurance
If you're unable to find coverage, you can consider getting a graded benefit whole life insurance policy. These types of policies are designed for people in dire health situations, don't require a health survey to get approved and offer guaranteed acceptance.
However, the drawbacks include:
- The policies offer a limited death benefit. Some companies pay out between $25,000 and $150,000, which is much lower than a traditional benefit.
- The insurer could impose a waiting period exceeding that of a traditional policy.
- Premium rates typically exceed those of traditional policies.
- The benefits become available in increments as a form of protection for the insurance company, so your benefit isn't available right away.
Making the final decision
To find the best policy for you and your family, seek the help of an independent insurance broker or a website that offers rate-comparison tools.
"The importance of using an independent broker versus an agent with a specific company is the broker might be able to find good companies that offer better offers based on your diagnosis and treatment," says Karen Lee, an independent certified financial planner.
The goal: Getting the life insurance policy that will keep your family secure for years to come.