Cancer survivors may be nervous about qualifying for life insurance, but with survival rates increasing and underwriting procedures changing, they stand a better chance of getting coverage, says Darren Devine, a financial planner with Sun Life and the president of Devine and Associates Financial Services in Guelph, Ont.
“The majority of people who’ve had cancer believe that obtaining insurance is absolutely impossible,” Devine said. “But the underwriting world has evolved greatly.”
In the past, life agents would tell cancer survivors to turn to specialty insurers that issue policies with limited face value, exclusions and high rates. But mainstream insurers will now consider those applications and may offer standard ratings depending on factors like cancer type and stability period, said Banasha Shah, a consulting actuary at Jennings Consulting.
“The type of treatment that they had, and the length of time since they’ve been in remission will, I think, inform whether or not people will qualify,” Shah said. “But the fact that [they] can apply now without [being told], ‘Don’t bother, go to one of those specialty products,’ is what has really changed.”
Sun Life offers coverage for cancer survivors across all its life products, said Michael Van Alphen, vice-president, insurance solutions with Sun Life. Underwriting depends on a sufficient recovery stability period to ensure there has been no reoccurrence for several years, depending on the type and stage of cancer.
Each cancer survivor’s case is assessed individually, but Sun Life can make an offer “the majority of the time,” Van Alphen said. “Some of the offers will have a rating, but it is possible that a cancer survivor could qualify for a standard offer.”
Cancer survivors can apply to all of Manulife’s life products based on similar underwriting factors after the applicant has completed treatment, said Karen Cutler, head of underwriting at Manulife.
More people survive cancer than ever before, Cutler said.
Insurers tend to follow cancer survival data closely to understand how various cancer types respond to the latest medical interventions. The five-year survival rate for some thyroid cancers, for example, is close to 100%. For pancreatic cancer, on the other hand, it is 20% or less, according to the Canadian Cancer Society.
Even with low survival rates, the longer an applicant survives with cancer, the more likely they are to qualify for coverage, said Byren Innes, managing director of Jennings Consulting.
Higher-stage cancers have an increased risk of recurrence, Cutler said. While applications within the first five years of treatment completion are more likely be rated, those premiums come down over time. For example, someone who had melanoma skin cancer removed six years ago could have a standard-rated policy, depending on the stage of the cancer they survived, Cutler said.
If an applicant is denied for applying too soon after treatment ended, the insurer could issue a lesser product in the meantime and ask the applicant to reapply for a mainstream product later, Shah said.
Unlike diabetes, cancer doesn’t have ongoing management, so insurers want to get cancer survivors into mainstream products as part of the standard population, even if there is a rating, Shah said. “We want to bring them into the mainstream and adjust for their survival statistics.”
When working with clients who survived cancer, life agents should ask for details such as the type and stage of cancer, the treatment received, when treatment was completed and whether there are ongoing concerns, Cutler said.
Agents should also ask about the client’s premium tolerance early in the conversation. If the offer comes back rated, agents should gauge whether the client can pay the higher premium or would prefer to take a lower face amount, as an underwriter may reach out to the agent offering two quotes, Cutler said.
To temper client expectations, agents should inform them that the insurer could rate or deny the policy altogether, Devine said. “The last thing you want to do is over-promise and under-deliver.”
If the application is rejected, they could look at guaranteed issue products like a group insurance plan from an employer, Devine said. Self-employed clients may be able to join a group plan through a professional association.
In addition, agents should encourage their client’s partner to buy life insurance.
“The spouse that has suffered the illness always looks back with a little bit of regret saying, ‘Shoot, I should have dealt with this stuff in advance,’” Devine said. “Unfortunately, it reiterates to the healthy spouse, ‘I better take a really good look at [insurance] because it’s health that buys the coverage.’”