Ask LH: Can A Former Cancer Sufferer Get Life Insurance?

I had Cancer 17 years ago, treatment went perfectly and I have been clear since. However, now it seems impossible for me to get life or accident insurance, which leaves a big burden for my family if something should happen to me. Is there any way I can get life insurance? I have had letters from doctors, but I always end up rejected on applications. Thanks, David

Picture: pictures of money

Dear David,

This is a difficult topic to cover, because it lies in the space that insurance companies don't really want customers to think about. Despite all the nice fluffy advertising that focuses on how much help they'll provide in the case of health issues (or home problems, or travel, car or any other type of insurance), they're not actually in the business of helping. They're in business to make money, and as such they do set their rates based on expected risk profiles. The ideal health insurance prospect for an insurer would be someone who never got ill at all.

In your case, the cancer treatment may well have gone perfectly, but you're stuck because they still view you as a high risk case, and as such, a money-losing proposition.

The terms and conditions of every health insurance policy do require you to disclose your cancer diagnosis. Failing to do so would be a primary reason to exclude you from cover for any illness or accident, and in general, if an insurance company can find a way to get out of paying coverage it will do so.

Having said that what they may be doing is illegally discriminating against you, at least as it relates to accident insurance. It's not legal to discriminate when offering insurance products under the 1992 Commonwealth Disability Discrimination Act. You're covered by that act in rather specific terms:

It includes a person with one disability as well as someone with more than one disability. It applies whether the disability is total or partial and whether the person:

• has had a disability in the past (for example, if a person is a cancer survivor or has had a past episode of mental illness)

Now, the tricky bit here is that they're not allowed to generally discriminate, but they are allowed to deny coverage based on "on the basis of actuarial or statistical data where this is reasonably available."

Unfortunately there's a lot of data around cancer that could support rejecting coverage, at least as it relates to life insurance. Accident insurance on the other hand is a completely different case, and I can't see why you can't appeal to them on that basis. Your likelihood of being flattened by a steamroller is no different to that of the general population, after all. If they're still rejecting you it may be worth chasing up specific legal advice, but you're unlikely to get far trying to get coverage that doesn't at the very least exclude any kind of cancer consideration.

What may be worth checking is if your existing superannuation cover provides life insurance as part of its default package, especially if you were making contributions prior to your cancer diagnosis. Again you'd need to carefully read the terms and conditions, as they may not cover you -- but it's worth having a look.

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Comments

    Heya David,
    While I am not an insurance expert I had some exclusions that were precluding me from getting life insurance and income protection insurance also. It is something I wish someone had told me about earlier in my life and career... but I digress.

    After much hunting around I was able to get onto Zurich via iSelect... not doing a sales pitch for them by any means, however from what I have heard (and learned) during that process... Zurich often is more lenient where others are not and while they may exclude cancer from your policy for the future, you may be able to get cover for any other issues. I can say this was very true in my case also... where others outright rejected me, Zurich took the extensive time to review my case in detail and were finally able to insure me (albeit with a 50% loading).

    Fingers crossed you are able to get it sorted and get yourself some cover, hope what I learned from several years of banging my head against a brick wall trying to get insurance might help you too.

    Can happily say I now have, income protection, trauma and life insurance :)
    Stuart

    Last edited 28/07/15 1:50 pm

    My girlfriend suffered two brain aneurysms, one burst and the other was just about ready to go.
    She ended up having two operations done to fix the problem over a few years.

    She came out of fine (luckily) but when it came to health insurance she found it equally as tough. We actually laughed at how eager the various companies were to sign her until she mentioned the aneurysms. Listening to them pretend like it wasn't a big deal while instantly backing off the hard sell was both funny and infuriating at the same time.

      Under the Private Health Insurance Act 2007, a health insurer may impose a 12 month waiting period on benefits for hospital treatment for pre-existing conditions.
      http://www.phio.org.au/facts-and-advice/the-pre-existing-conditions-rule.aspx

      Health insurance is community rated, not risk rated, so they will take you after this waiting period.

      Last edited 28/07/15 4:45 pm

    Something worth trying is something called "self-insurance". Basically, you set a side a "premium" unto a specific bank account - to be remained untouched until something happens. Fancy term for savings, under a beneficiary's name, that requires self-discipline to leave it untouched. It was how insurance sort of started anyway.

      Only difference here would be that a matching "premium" into a savings account won't compound and is unlikely to cover major medical expenses that could cost tens of thousands if not hundreds of thousands of dollars, unlike a proper health insurance plan that relies on most people not claiming medical expenses regularly and pays out a large lump sum for a small premium payment every month/year. A $1200/year health insurance plan will cover a $100,000 chemotherapy/radiation treatment, whereas putting $1200/year in a savings would barely cover the cost of a single injection/session. I guess having some savings rather than nothing helps, but you really can't compare the two.

        Are we talking Australia here? Medicare covers the $100,000 chemo. The $1200 pays for a nicer hospital room (in part) and some associated expenses (in part).

        Life insurance is a different kettle of fish. The best option, as explained in the article, is to investigate whether you have existing insurance as part of your Super fund and have a read of those terms. If you're happy then upgrading your insurance through your super is nearly always cheaper than buying a separate policy.

        Last edited 28/07/15 6:57 pm

          My Mother-in-Law had a cancerous growth removed from her face and required 4 months of radiation treatment. She had private health insurance but she was told she'd have to wait at least 6-8 months before the surgery could even take place if she chose to go via Medicare. On private health insurance, she booked and got the surgery complete in under 3 weeks. I'm not sure what that really means (I'm not an Australian resident so I am ineligible for Medicare) but from my understanding private health insurance is preferred and gets you more timely treatment?

          Might be the difference between life/death when it comes to things like cancer etc. Happy to be corrected though...

    Speak to a financial adviser...one that does a lot of personal insurance and isn't tied to one or two main insurers. Knowing who and what to do is worth it, and generally no dearer than DIY, just St Luke's ke a mortgage broker. Life insurance with that gap since treatment should be fine, although can still cop an extra cost on top of standard rates.

    Great post! Something I wanted to ask a few months back too. I finally got into life insurance with bunch of exclusions as well as loading. But I'd like to ask here is about Income Protection. I did a lot of Running post-op, heck I was reborn. Lost nearly 60kgs, but one thing happened during running was that I started getting scapula related pains, bad poster I was told and something that has been discussed here too in the past, nothing uncommon for runners. This I had to disclose to the insurance companies and due to that I was rejected on IP multiple times. Silly as it sounds they'd rather have me be 130kg and insure me but not the other way. Can anyone tell me if they are out of their minds here and discriminating. Btw a few physios and I was back running again.

    My brother had cancer. He's got life insurance, but not covered for cancer or other conditions that could be causes by cancer.

    Financial adviser here..

    I've had a few clients that have come with similar questions and the answer is never simple.

    Usually insurers won't offer cover for cancer survivors within a short period after remission. We had one particular client who was clear of Lymphoma for three years, and was offered cover with a permanent % based loading plus a temporary per $1,000 of cover loading - meaning the cover was very expensive.

    The author is right in saying the insurers won't take unnecessary risk with somebody who has experienced a cancer in the past - they simply work off the data which suggests that they recur and often in a more aggressive fashion.

    I agree that you should seek the advice of a financial planner or risk specialist. They won't charge you for consultations or to write the policy as currently they are remunerated by the insurers for offering the advice.

    Coming at things from a slightly different direction, what should you do if you currently have life insurance, but have just been diagnosed with cancer? Can they cancel your policy? Charge you more? ... ?

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