Because cancer is the second leading cause of death, it’s important to consider its role in your life insurance policy. Cancer can be difficult to get covered by a policy, but it’s not impossible. Financial advisors with expertise in underwriting cancer are enabled to identify our industry’s most favorable solution for their clients with a history of cancer.
Let’s look at the role cancer plays in the life insurance process.
The Impact of Cancer on Life Insurance Underwriting
With most cancers, early and accurate diagnosis, aggressive treatment, and appropriate regular medical follow-up lead to the most favorable medical outcomes and subsequent life insurance underwriting assessments.
Life insurance offers are typically postponed for one year or more from the date of your last treatment. This is because if a cancer will recur, it’s most likely to do so within a year of the last treatment. However, if you have a metastatic form of cancer, you may have to wait three to five years before receiving a life insurance offer. And “Stage 4” cancers, which include forms that spread throughout the body, may not be eligible for offers of insurance until 10 years after the date of last treatment.
Just like anything, there are exceptions to the rule. It’s possible for very early forms of cancer to be underwritten at standard rates immediately after its removal. This will depend on the type of cancer, your diagnosis, and the life insurance company.
The Importance of Insurer Selection
The good news is that it is often possible to negotiate fair offers of insurance for individuals with a history of cancer — but insurer selection is critical. Experience with a particular type of cancer is important as insurers cannot accurately price a risk they do not understand. They may end up making a very conservative offer, resulting in higher costs to the insurance buyer.
Many insurers have medical directors with expertise in one or more impairments, allowing them to offer insurance at much lower rates than insurers without such expertise. Ultimately, to identify the most appropriate solution for an individual with a particular impairment, it’s necessary to “shop the market” for the most suitable solution. During this process, an advisor must consider your unique medical circumstances, an insurer’s expertise with that particular impairment, the way the insurer prices products, insurer financial strength rating, and history of consistently good customer service.
Pre-Underwriting Questions for Individuals with a History of Cancer
For an advisor to identify the most favorable underwriting strategy for you, it’s important to gather a few key medical facts in advance of obtaining a formal application. Doing so enables both the advisor and you to make an informed decision based on realistic pricing expectations.
There are over 200 forms of cancer. Underwriting for many of the more common types is based on multiple cancer-type specific variables and unique classification systems. For example, for prostate cancer, the most common form of cancer in aging men, the Gleason Score is highly relevant to underwriting, along with readings of PSA before and after appropriate treatment. Therefore, financial advisors who are aware they will be working with an individual with a history of prostate cancer are best served by asking prostate cancer specific questions.
In many settings, financial advisors are not aware in advance that a client has a history of cancer. In that case, the most effective strategy is to obtain preliminary data that applies to most cancers. During a meeting, you and your advisor may address these questions:
- Exact name for the cancer
- Sub-classification of the specific type of cancer, if any
- Date of initial diagnosis
- Cancer Stage, which indicates size and location of tumor
- Cancer Grade, which indicates the level of aggressiveness of the tumor cells
- TNM Staging - for example, T1N1M0. Provide values for T __ N __ M __
- Unique classification system, if used (e.g. Gleason Score for prostate cancer)
- Type(s) of treatment, such as surgery, radiation, chemotherapy, etc.
- Ongoing treatment or preventative measures (e.g. Tamoxifen for breast cancer)
- Date of last treatment ( the critical date for underwriting purposes)
- Frequency of follow-up
- Date of last follow-up
- Describe any evidence of recurrence, if any
Many medical systems now provide patients with their medical records online. If you have access to your surgical pathology report (often referred to as “path report”), provide that information to your advisor, as it can provide for a more accurate pre-underwriting assessment. Once an advisor has gathered all relevant information, he can contact his preferred risk underwriting agency and can shop the market for you.
Evaluating Your Life Insurance Options
Life insurance can be complicated and confusing. If you have questions about how certain medical conditions, such as cancer, can be underwritten into a policy, don’t hesitate to call my office. We can set up a meeting and review your options, as well as the next steps. You can reach me by phone at (612) 746-2272 or by email at ernest_draper@fosterklima.com.
About Ernest Draper
Ernest Draper is a financial advisor with more than 18 years of experience in the financial services industry. Specializing in innovative investment strategies and wealth preservation products, he works with affluent professionals, executives, and business owners. Along with his many years of experience as an advisor, Ernest is also certified as a Chartered Life Underwriter®, Chartered Financial Consultant®, Chartered Advisor for Senior Living®, and CERTIFIED FINANCIAL PLANNER™ professional. With these designations, Ernest has the advanced training and knowledge to understand complex planning strategies and techniques facing many successful people and their families. Based in Minneapolis, he is licensed to work with clients in Minnesota, Illinois, Wisconsin, Maryland, Washington D.C., Missouri, Texas, and Connecticut. To learn more, connect with Ernest on LinkedIn, email him at ernest_draper@fosterklima.com, or call his office at (612) 746-2272.