Does Life Insurance Pay Out For Cancer Patients [Yes + Tips]

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does-life-insurance-payout-to-cancer-patient

Does Life Insurance Payout For Cancer Patients?

When you’re a veteran high-risk life insurance broker, you come across many client concerns.

If you receive the question often enough, it is worth addressing.

Does life insurance payout for cancer patients? Yes, life insurance does pay out for cancer patients. If you die due to cancer, your death benefit will be paid out by the life insurance company. Also, there are life insurance companies that pay out a living benefit for cancer as a critical illness.

If you want life insurance to pay out if you’re a cancer patient, then you need to get approved for coverage first.

We work with the best life insurance companies in the industry for cancer survivors and even have options for cancer patients as well.

Life insurance doesn’t have to cost you an arm and a leg if you’re a cancer survivor.

Compare the rates of over 50 of the most reputable life insurance companies in the United States with our free rate tool below.


Our article below will cover the following information about life insurance paying out for cancer patients:

When Does Life Insurance not Pay Out for Cancer Patients?

What is the Difference Between a Death Benefit and Living Benefit for Cancer Patients?

Final Thoughts on Life Insurance Pay Outs for Cancer Patients

When Does Life Insurance not Pay Out for Cancer Patients?

If you are looking for life insurance with cancer, your journey can be a difficult one depending on the type of cancer that you have.

While you certainly can buy life insurance after being diagnosed with cancer, it is much easier to purchase the coverage pre-diagnosis while healthy.

However, whether you purchased your life insurance before or after your cancer diagnosis will not affect the payment of your death benefit.

Even though cancer is a serious condition that affects millions of people, once you’re approved for life insurance, you’re approved.

However, there are certain rare instances when a life insurance company can contest the death benefit or even exclude your cancer as a payable claim.

Every life insurance policy typically has a 2-year contestability clause built into the policy where the insurance company can contest a death claim.

In practice, this is extremely rare, but it can happen.

Life insurance companies want to protect themselves against fraud.

If it is discovered that you lied on your application or misrepresented your health, then the life insurance company could deny your death claim.

In some limited scenarios, life insurance companies can exclude certain conditions from triggering the death benefits, usually reserved for business insurance.

For example, if you need life insurance for a buy-sell agreement and cannot get covered due to cancer history.

This, in practice, is also extremely rare and only offered by high-risk life insurers such as Petersen International Underwriters or Lloyds of London.

Your policy will explicitly state what conditions are not covered, if any at all, in the policy language, so there will be no surprises.

While not ideal to have a cancer exclusion in your life insurance policy, if you cannot otherwise find life insurance coverage, it is still a great option.

The last instances when a life insurance death benefit may not payout for a cancer patient is when you purchase guaranteed life insurance.

Guaranteed acceptance life insurance comes with a modified death benefit usually in the first 2 years of the policy; although, sometimes 3 years.

During the modified death benefit period, the death benefit typically returns your premiums plus interest to your beneficiaries for medically-related deaths.

While the policy technically pays out a death benefit for cancer patients who die during that period, it isn’t the full face amount purchased until the graded or modified period is over.

After the modified death benefit period is over, your guaranteed issue life insurance policy will pay the full death benefit regardless of the cause of death.

Modified death benefits can sometimes lead to confusion for the beneficiaries who believe that the life insurance policy is not paying out a death benefit to cancer patients.

However, this is often a misunderstanding of how guaranteed issue life insurance works.

Guaranteed issue life insurance policies make it very clear on both the application and the terms of the policy how the modified death benefit works.

If this is the direction you are considering, be sure to look at companies such as American General Life Insurance Company.

They offer perhaps the best-guaranteed issue life insurance on the market.

We suggest you inform your beneficiaries how your guaranteed issue life insurance death benefit works, so there are no surprises when a claim is filed.

What is the Difference Between a Death Benefit and Living Benefit for Cancer Patients?

Not only does life insurance payout a death benefit for cancer patients who die, but certain policies payout living benefits for critical illnesses, such as invasive life-threatening cancer.

Ameritas Life Insurance Company is one of the companies that offers perhaps the best possible life insurance coverage for cancer patients using these unique living benefits to trigger cash payouts to the policyholders.

Many of the best no-exam life insurance companies included built-in riders for critical and chronic illness.

If you’re diagnosed with invasive life-threatening cancer, you can advance a portion of your death benefit while you are still alive in a living benefit payout.

Some fully-underwritten life insurance companies, like American National Life Insurance Company, are paying out living benefits to their policyholders.

While not every life insurance company includes living benefits for critical and chronic illness in their policies, virtually every company includes a terminal illness rider.

If your cancer becomes terminal, you can accelerate a portion of your death benefit while you’re still alive regardless of what the cause of your terminal illness is.

Final Thoughts on Life Insurance Pay Outs for Cancer Patients

Yes, life insurance does pay out for cancer patients.

In fact, there are few rare instances when a life insurance policy doesn’t payout, such as if you have a cancer exclusion written into your life insurance policy.

Once you’re past the two-year contestability period in your policy, your life insurance company should pay the claim promptly with no contestation.

If you pass away during the contestability period, the life insurance company may investigate to make sure that there was no fraud or misrepresentation of your health to try to hide your cancer.

Additionally, if you have a guaranteed issue life insurance policy, it will pay out either a modified death benefit or the full death benefit to your beneficiaries if you’ve survived the waiting period.

We suggest that you inform your beneficiaries of your decision to purchase a guaranteed issue life insurance policy and explain to them how it works to avoid any future misunderstandings.

You can use our website’s quote tool to easily compare the rates of the top life insurance companies that have a reliable history of paying the claims.

If you have any further questions on how life insurance companies pay claims, please feel free to contact us.