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Beating the Odds Twice: Getting Coverage for Cancer Survivors

As life insurance agents, we know how difficult it can be for those who have ever been diagnosed with cancer to qualify for life insurance. In fact, because of their diagnosis, many cancer survivors may not even take the steps to apply for the protection they need.  
But what I have found is that many cancer survivors believe it isn’t possible to qualify for coverage because somewhere along the line they were told this information by a life insurance agent.
Unfortunately, many captive agents who are locked in to only their own company’s underwriting guidelines are led to believe that if their insurer won’t accept a cancer survivor, then no other insurer will either. But this isn’t necessarily the case.
In fact, depending on the type of cancer the client was diagnosed with — as well as the amount of time that has passed since the diagnosis — it could be possible for a client to qualify for coverage via a traditionally underwritten policy. However, it must be evaluated on a case-by-case basis. While not all life insurers will be receptive to those who’ve had a cancer diagnosis, we have had a great deal of success with several of the top-rated carriers. 

Presenting a Client to the Insurer

In addition to the basic information  requested on the application for coverage, a life insurance applicant who either has cancer at the present time or had cancer previously may be asked to provide information on their disease.
Beating-the-Odds-Twice-chart.jpgThis information includes when the initial diagnosis was made, the type of cancer  diagnosed, and the types of treatments the applicant has undergone and the types of medications that have been prescribed. In addition, the applicant may be asked the grade or stage of cancer diagnosed, whether the applicant has experienced any relapses, and whether the applicant has been in remission and for how long. The applicant also may be asked when treatment began and when it ended.
In most cases, the life insurance underwriters also will want to review copies of the applicant’s medical records, as well as records from any medical specialists they see for their condition. This will help the insurers obtain a more accurate picture of the applicant’s overall health situation.
Therefore, prior to moving forward with an application, it will be important to have your client gather as much of their medical information and health records as possible, as the insurance underwriters likely will want to review it. 

How an Agent Should Prepare a Cancer Survivor for the Process

Cancer survivors as well as those who currently are in remission could possibly qualify for a fully underwritten life insurance policy. But in order for the survivor to prove to the life insurer that they are a good risk to take on, the underwriters typically will want to review current records from the applicant’s primary care physician, as well as their most recent pathology reports. As with most other medically underwritten policies, a full paramedical exam usually will be required.
Because of the applicant’s condition, it’s important to have the client provide as many details as possible about their health and medical issues. This way, the underwriters can get the most detailed picture possible about the applicant’s health.
Due to the additional record review, the underwriting of a cancer survivor’s application will typically take longer than normal — so the client should be prepared for the longer wait time during the application process. And regardless of the individual’s current situation, there is still the possibility of being declined. Therefore, preparing your client for both the best-case and the worst-case scenarios is always a good idea.

Alternatives to Medical Underwriting

In some cases, a policy that does not require medical underwriting may be the best alternative. With these “no medical exam” policies, an applicant will not be required to go through the paramedical examination that is a necessary part of most traditional life insurance policy procedures. There is also no requirement for the applicant to submit blood and urine samples.
Because of this, many of those who apply for a no medical-exam-policy will be guaranteed the coverage they apply for. However, because these individuals are considered to be more risky to the insurer, the premium on these types of policies does tend to be higher than that of a medically underwritten plan.  

Preparing the Client for the Price

The premium charged for a life insurance policy on someone who has a history of cancer may vary based on the type of cancer and a number of other factors. These other factors may include the type of coverage chosen, as well as the amount of protection. It also may be depend on the individual carrier.
Some carriers may place the client into a substandard rate class with a table rating, while others may charge a temporary or a flat extra premium rate. With either of these, you should prepare the client for the extra price.
A flat extra, for example, entails an additional amount of premium that is charged per $1,000 of coverage. So if a client is applying for $100,000 in coverage and he is charged a flat extra of $2.50, then the policy would cost an additional $250 per year ($2.50 x 100). Flat extras often may be charged only for a certain period of time such as five or six years, and then they drop off.
Table ratings are also a way to charge additional premium in order to compensate for the additional risk the insurer is taking on. These are identified in various ways, such as Table 1, 2 and 3, or Table A, B and C.
As an example, if the standard premium for a term insurance policy is $200 and a client has a table rating of A, then they may be charged 25 percent more than the standard rate, or $250, for their coverage.
The premium charged on someone with a history of cancer may vary based on several other factors. Two of the biggest factors will be the stage or grade of the cancer when it was diagnosed and the amount of time since the last treatment. These factors also may depend on the individual carrier.

Taking the Next Step

Make sure you are upfront with your clients, and never give false hope. It’s true some people with cancer will never qualify for a fully underwritten life insurance policy. The more you know about the underwriting guidelines of each carrier, the better chance you have to get your clients covered. Knowing the key questions to ask can ensure that you give your clients the best shot at getting covered. 

Brad Cummins is an independent life insurance agent and founder of Local Life Agents, a top independent life insurance agency that offers life insurance products in all 50 states. Brad may be contacted at [email protected] .

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