When you take out any kind of insurance, insurers will first calculate your level of risk so they can decide whether or not to insure you and how much it should cost. This is what’s called the ‘underwriting’ process.
Income protection policies cover you in case you can’t work for any health reason. Since this is a health-related insurance product, insurers will need to know about your health history before agreeing to cover you. It’s important to be completely honest and accurate during the medical underwriting process to make sure you don’t invalidate your policy further down the line.
If you disclose a previous cancer diagnosis when you apply for income protection, you might find it more expensive or more difficult to get covered depending on a number of factors about your diagnosis – in particular, how long ago it was and how severe it was.
Can I buy income protection insurance after a cancer diagnosis?
You might be able to buy income protection after a cancer diagnosis, though the success of your application and how much it costs will vary from insurer to insurer based on the specifics of your diagnosis. They’ve all got different thresholds. Everyone who applies for income protection has to answer questions about their:
- Personal health history
- Family health history
- Height and weight (BMI)
- Smoking status
An insurer will take all of these factors into account when looking at your application. If you’ve had cancer, many insurers will require several years of remission (usually between 7 and 10 years) before offering you cover, while others might offer cover sooner but add an exclusion relating to your diagnosis. If your cancer was a long time ago and wasn’t severe, you could be offered cover on standard pricing rates.
Getting help from an adviser can really help if you’ve previously been diagnosed with cancer. They’ll quickly be able to tell you which insurers are most likely to accept your application, and who offer the best terms for you and your circumstances.
What will insurers need to know about my cancer diagnosis?
If you’ve ever been diagnosed with cancer, it’s likely you’ll be required to provide the following information during the underwriting process:
- The location and type of cancer you were diagnosed with
- How long ago you completed treatment and went into remission
- Whether the cancer spread to any other part of your body
- The classification (if known)
Depending on the type of cancer you were diagnosed with, insurers might ask you for extra information – e.g. if you had breast cancer, they’ll ask about the tumour size, tumour grade, and whether any maintenance treatment was prescribed.
How will a cancer diagnosis affect my income protection application?
Typically, there are a few possible outcomes if you disclose a previous cancer diagnosis during the medical underwriting for income protection:
- Your application being accepted as normal, with standard pricing rates (this will only happen if you’ve been in remission for more than 7-10 years and your diagnosis wasn’t very severe)
- Your application being accepted but with a ‘loading’ on the price (i.e. your rates will be between 50% and 150% higher than they would be for someone who hasn’t had cancer)
- Your application being accepted but with an exclusion in the policy conditions relating to your diagnosis (this could happen with some insurers if you’ve been in remission for less than 7-10 years)
- Your application decision being postponed (this happens if the insurer thinks your diagnosis poses too much of a risk right now, but has the potential to improve in the future)
- Your application being declined (this can happen if your diagnosis was severe and you’ve been in remission for less than 7-10 years)
Why are some people too high risk for insurers?
It’s true that having a previous cancer diagnosis could make you ineligible for products like life insurance and income protection insurance, especially if the diagnosis was recent or severe. The same is true of other health conditions. The reason insurers exclude some people on the basis of their health is so that they can offer a product that is fairly priced for the majority of people.
What’s the logic behind this? People with an existing or previous health condition (especially if severe) are more likely to claim on health-related insurance products, so insurers would need to charge more in monthly premiums if they were to carry the risk of covering these people. A higher rate of claims by people with severe health issues would drive the price up for everyone. This is deemed unfair by insurers, so they tend to decline covering people with severe health issues.
Why it’s important to disclose your cancer diagnosis
When applying for income protection insurance, it’s extremely important to answer all the health questions honestly. If you don’t disclose a previous cancer diagnosis, even if you’ve been in remission for a long time, you risk invalidating your policy and it not paying out in the future, when you need it to. The same applies to any other health condition you have.
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- You can apply for income protection even if you’ve previously been diagnosed with cancer
- If you cancer diagnosis was recent and/or severe, you might find it more expensive or more difficult to get covered
- If your cancer diagnosis was a long time ago and/or less severe, it might not affect your eligibility or the price
- It’s very important to provide accurate health information during the application process, otherwise you risk invalidating your policy in the future
- Depending on the severity of your cancer diagnosis and how long ago it was, insurers might accept your application as normal; accept it but charge a higher premium; accept it but add an exclusion to your policy; postpone their decision; or decline your application