What to Do When You Can't Get Life Insurance

After cancer, I couldn’t get term life insurance. I called an insurance broker who contacted more than a dozen separate companies and not a single one would sell it to me. 

And I’ve heard the same from other cancer survivors. 

Often, it’s not the cancer that disqualifies you, but another medical issue that emerges after treatment. For me, I have an autoimmune disorder and lung complications. The autoimmune disorder was likely always going to show up no matter what but chemotherapy probably pushed it earlier in my life.

Insurers take into account several factors when weighing whether to sell you a policy. In the industry, this is known as underwriting risk.

Some cancers, like skin cancer, aren’t a big deal to insurers and it can often be easy to get insurance, says Loretta Worters at the Insurance Information Institute. With other cancers, like pancreatic or brain, it can be tougher to get a policy. 

Insurers don’t usually mind when patients have surgery as a treatment, but chemo, radiation and immunotherapies can often scare them off from writing you a policy. 

Insurers also evaluate the cancer stage and grade at diagnosis, as well as the years since you’ve had treatment. Most companies like to see two to five years since treatment, says Loretta. Not surprisingly, insurers also take into account your current health. 

Life insurance is the backbone of real financial planning in America, especially if you have kids or co-own a home with a spouse. That safety net allows us each to feel comfortable taking risks. But one of the most common life insurance products in America—term life, insurance given to you over a specific term in your life, say 10 or 20 years —is often not available to us survivors, so what do we do? My advice is to not ignore the problem.

The easiest way to get life insurance as a survivor is to buy it through your employer. These policies are cheaper, don’t require medical checks and are portable—meaning you can take them with you after you leave your company. 

There are other options if a work policy isn’t available to you.

Guaranteed issue life insurance is specifically designed for older people or cancer survivors—or really anyone who can’t get life insurance because they are sick or old. 

With guaranteed life, there is no medical exam. You are guaranteed acceptance and get permanent coverage as long as you pay your premiums. That said, it’s not really that much coverage and it has a high cost. If you live a long period of time, you are often better off just saving the money. 

This insurance is a smart way to pay for your funeral or lower the burden on your family in a small way. But the policy is unlikely to do much more than that and can be capped as low as $25,000. There’s also a small warning: There can be a waiting period of a few years before the full death benefit will be paid out. 

Simplified issue life insurance is another product to think about. It’s a lot like a guaranteed policy with a few key distinctions. 

With simplified issue life insurance, you will have to answer some health questions. This enables the insurance company to offer you a possibly higher death benefit for a lower premium or cost. There is also no waiting period with simplified issue insurance, unlike the potential couple years needed for guaranteed.

Some insurance companies offer annual renewable term life insurance–you are paying for coverage one year at a time. You aren’t locking in a payment price for years but you are getting temporary insurance until hopefully your health gets better. And then immediately try again the next year for a longer policy.

Wilmington, N.C. financial adviser Megan Kopka has personally tested the limits of health and insurance. Her husband was diagnosed with ALS, Lou Gehrig’s disease, in 2010. 

She navigated health insurance, grants, and a host of other financial assistance while her husband was getting sicker. She looked at everything from getting a divorce on paper to using the Center for Medical Advocacy to get home healthcare providers.

She should have had no problem sorting through her options given she is a Merrill Lynch alum and a certified financial planner, but she described the experience as “insane” and overwhelming. 

Here are three of her take-aways from her harrowing ordeal and her years advising others. 

As for those recovering from cancer, a year or two out of remission is the sweet spot to try and get life insurance, Megan says, noting some of her clients have succeeded where I failed. Insurance companies are constantly changing the actuarial science behind their rates and improvements in science could make you insurable when you previously were not. 

Still, as the years go on, you are likely to get less healthy. So, you are best to jump on trying to get coverage right away, says Megan. 

You need to shop for a range of policies across a range of providers and call around to different brokers and agents to help, Megan says. You might be rated poorly for one company and highly with another. Don’t take the first offer, try to get several and see what you have.  

Beyond insurance, even in her darker days, Megan says that financial optimism is just as important as health optimism. You have to see yourself saving for a home or a vacation or any of the things you want to do in your life. Saving money for rewards is a part of the healing process and living process. 

“Taking on the mental ownership that you will be around for 5 or 10 or 40 more years is a really healthy thing to do,” says Megan.

After Treatment does not provide tax, legal or financial advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for advice.