Colorectal cancer is a significant health concern in the U.S., standing as the third most frequent cancer diagnosis for both men and women, aside from skin cancers. Although common, there’s a silver lining: both the number of new cases and deaths have been on the decline over the past two decades. This positive trend is attributed to advances in screening technology, earlier diagnosis, and more effective treatment options.
While it can be challenging to find life insurance coverage if you have a pre-existing condition, it’s not impossible. In this guide, you’ll learn how life insurance underwriters evaluate a history of colorectal cancer, your coverage options, and how to find the best price.
Table of Contents
- Life Insurance and Colorectal Cancer: How It’s Underwritten
- Cost of Life Insurance and Case Studies
- Best Life Insurance for People With Colorectal Cancer
- What to Do if You’re Denied Life Insurance
Life Insurance and Colorectal Cancer: How It’s Underwritten
If you have a history of colorectal cancer, it can impact your life insurance options.
When you apply for life insurance, the insurers use a process called “underwriting” to evaluate your health and other risk factors. They will ask about your medical history, conduct a short physical examination, and may even request additional tests or records. For applicants with a history of colorectal cancer, insurers will likely require more detailed medical records and possibly specialist reports.
Here are some factors that underwriters consider:
- Stage of Cancer: The stage at diagnosis often determines your insurability. Early-stage cancers are generally easier to insure than late-stage ones.
- Treatment History: Underwriters will look at the types of treatment you’ve undergone, such as surgery, chemotherapy, or radiation, and the success of those treatments.
- Time Since Treatment: The more time that has passed since successful treatment, the better your odds of securing a policy at a reasonable rate.
- Recurrence: Any recurrence of cancer could limit your eligibility or increase your premiums.
In addition to your medical history, underwriters also take into account other risk factors like age, gender, and lifestyle habits, such as your alcohol and tobacco use.
Once they’ve assessed all these factors, the underwriter will decide what type of coverage you can get and how much it will cost you. In some instances, they might postpone your application for further review, or even deny it.
If you are approved, you’ll be placed into a “risk class.” This class determines the cost of your insurance policy.
Cost of Life Insurance and Case Studies
Risk classes range from Preferred Plus to Substandard.
- Preferred classes are reserved for the healthiest individuals and offer the best pricing.
- Standard risk classes are for people with average health and life expectancy.
- Substandard classes are for high-risk individuals.
Substandard applicants are often “table rated”. If you receive a table rating, your premium will generally be the Standard rate plus an additional 25% for each step you move down the table, either Tables A-J or 1-10, depending on the insurance company’s format.
|Table Rating (alphabetical)||Table Rating (numerical)||Pricing|
|A||1||Standard + 25%|
|B||2||Standard + 50%|
|C||3||Standard + 75%|
|D||4||Standard + 100%|
|E||5||Standard + 125%|
|F||6||Standard + 150%|
|G||7||Standard + 175%|
|H||8||Standard + 200%|
|I||9||Standard + 225%|
|J||10||Standard + 250%|
In some cases, insurance companies might also add a fixed additional fee, known as a “flat extra,” to the premium. This fee is meant to offset the higher risk the company takes on by insuring you. The duration of this flat extra fee can vary; it might apply for the entire duration of the policy or only for a limited number of years, depending on your specific situation.
Dig deeper into table ratings and flat extras in our guide: What Is a Substandard Risk in Life Insurance?
Let’s take a look at a couple examples of individuals with a history of colorectal cancer applying for life insurance to get a better grasp on underwriting and pricing.
Example 1: Elizabeth, Age 70, Applying for a $250,000 10-Year Term Policy
Elizabeth has a history of Grade I localized adenocarcinoma of the colon that was treated with surgery ten years ago. There has been regular follow up with no evidence of recurrence.
Life Insurance Company X determines Elizabeth qualifies for Standard Plus, putting her annual premiums at approximately $2,100.
Example 2: James, Age 65, Applying for a $250,000 15-Year Term Policy
James has a history of Grade IV adenocarcinoma of the colon that invaded two local lymph nodes that was treated with surgery and chemotherapy. There has been regular follow up with no evidence of recurrence since the completion of treatment just over seven years ago.
Life Insurance Company Y determines James qualifies for Standard. However, due to his medical history, he will have to pay an additional $15 flat extra for the first three years.
This means he’ll be charged $15 for every $1,000 of his $250,000 coverage, amounting to an extra $3,750 per year. This will be added to the standard annual premium of $2,881 (for a total of $6,631). After these first three years, his yearly payment will go back to the standard rate of $2,881.
Example 3: Betsy, Age 50, Considering a $250,000 20-Year Term Policy
Betsy has a history of adenocarcinoma of the colon metastatic to the liver. She has not seen a doctor since completion of surgery and chemotherapy two years ago.
Unfortunately, Betsy would be declined for traditional life insurance.
See what you’d pay for life insurance
Best Life Insurance for Those With a History of Colorectal Cancer
If you have a history of cancer, finding coverage isn’t impossible, although the process may be more complicated and the premiums higher compared to those without a history of cancer.
Let’s explore your coverage options.
Term Life Insurance
Term life insurance is the most popular choice for families due to its simplicity and affordability.
- Duration: You can select a specific term length, usually between 10-40 years. This timeline ideally should align with the period when financial support for your dependents is most needed.
- Purpose: Primarily designed for income replacement, this policy doesn’t offer lifelong coverage, making it a cost-effective option.
Permanent Life Insurance
Permanent life insurance offers lifelong coverage and can include additional features that might increase the cost. Here’s a breakdown of the different types:
- Whole Life Insurance: This offers guaranteed death benefits, cash value growth, and fixed rates, making it one of the pricier options. Participating whole life policies may even earn dividends.
- Universal Life Insurance (UL): UL offers flexibility, allowing adjustments to both death benefits and premiums to accommodate life changes. While it may have fewer guarantees, this adaptability can be attractive to many.
- Guaranteed Universal Life Insurance (GUL): For those seeking lifelong coverage without the extra features and associated costs, GUL is an appealing choice. It provides essential permanent coverage at a more budget-friendly price point.
What to Do if You’re Denied Coverage
If you’ve been denied coverage, you may still have some options. Don’t get discouraged.
Try Other Life Insurance Options
If you applied for traditional life insurance, like term or whole life, and were denied due to your medical condition, you may still have coverage options, such as guaranteed issue life insurance or accidental death insurance.
Guaranteed Issue Life Insurance
If you’re between 50 and 80, final expense life insurance (also referred to as guaranteed issue life insurance) may be available. Final expense insurance is a type of permanent life insurance that will last your entire life.
If you were declined due to a health issue, look into final expense life insurance because no medical underwriting is involved.
It’s important to know that final expense life insurance has lower coverage amounts than traditional life insurance. The premiums are also higher.
|The Cost of Guaranteed Issue Life Insurance - Male Applicant|
|Coverage Amount||Monthly Premium|
Consider Accidental Death Insurance
Accidental death insurance is likely an option if you can’t get traditional life insurance. This policy provides a death benefit if you die due to an accident.
This policy doesn’t provide complete protection. If you die due to illness, such as a heart attack or cancer complications, it won’t pay a death benefit. But it still provides some peace of mind and is very affordable.
Consider Life Insurance Through Your Employer
Many employers offer a small amount of group life insurance for very cheap or free. Take advantage of this.
Typically, you can buy additional life insurance coverage on top of the free group insurance without going through any underwriting. This is called voluntary life insurance; you can often buy up to 3-5 times your salary.
If you were denied traditional life insurance, we recommend accepting the group life insurance coverage and buying as much voluntary supplement coverage as you can comfortably afford.
Try Applying Again Through a Broker
If you applied through a captive agent, it might benefit you to apply to a broker. Captive agents only have access to the life insurance company that employs them, while independent brokers have access to many.
Not all life insurance companies underwrite the same way. The reason for your denial at one company may not necessarily result in a denial at another. Working with a broker is the best way to determine if you can get approved for life insurance.
Discover how agents and brokers differ and which is best for you.
As an independent broker, Quotacy has access to the policy and pricing of many different top-rated insurance companies. This means if you have a health issue, such as a history of colorectal cancer, we won’t just look at one option. We’ll comparison shop across our network to make sure you’re getting matched with the insurer that will treat you most favorably.
In addition, as a broker, we have a fiduciary responsibility to you, the client, before the insurance company. We’re in your corner, doing all we can to find you the best coverage possible.
Are you ready to take the next step? Get a term life insurance quote now and begin the process.