Navigating insurance hurdles after a cancer diagnosis
01 October 2012 | Magazine Archives FAnews & FAnuus | Features / Profiles | Dalene Allen, Altrisk
Communicating the implications of cancer with regards to insurance cover is an emotional and challenging conversation for a broker to have with a client. But given the prevalence of cancer and the fact that it is the leading cause of critical illness and disability claims, it is an important conversation to have. Dalene Allen, underwriting director and co-founder of Altrisk looks at cancer and its implications for insurance cover.
Medical advances have created more cancer survivors and the prognosis for many patients is close to standard life expectancy. However, survivors are still at a higher risk of recurrence and complications of therapy. A careful examination of each client’s unique conditions and follow-up healthcare needs is crucial in securing the best possible cover for a cancer survivor.
What is cancer?
There are over 200 known cancers that afflict humans. Cancer is the uncontrolled growth of abnormal cells that form malignant tumours and invade various areas of the body. Cancer can also spread to distant parts of the body through the lymphatic system or bloodstream in a process known as metastasis.
Important underwriting considerations
The availability, terms and cost of insurance after a cancer diagnosis depend on a number of factors such as the length of time the client has been cancer-free, the prognosis of the cancer, the type of cancer and the date of the last treatment.
Low-grade cancers such as certain types of skin cancers may not affect an insurance rating. More serious cases, however, may attract loadings, exclusions and waiting periods – or in severe cases, result in declined cover.
Some insurance companies will not provide cover to anyone who is still undergoing certain forms of aggressive cancer treatment. The underwriter would consider the following, based on the type of cover being applied for:
• Life cover: Having cancer presents a much higher, premature mortality risk. However, standard life rates could be offered as soon as three years post diagnosis. If the client has been in complete remission for 10 years it is likely that no loadings will be applied at all.
• Critical illness: Having survived cancer the applicant has a predisposition to new cancers as well as the potential risk of recurrent or metastatic cancers. This will result in a cancer exclusion.
• Disability: The treatment for cancer can result in many other side effects such as depression and suppressed immunity that can increase the likelihood of a disability, and therefore other exclusions such as depression could be applied in addition to the cancer exclusion.
What cover can a client expect?
Cancer exclusions would apply on disability and critical illness covers. In terms of life cover, a temporary level extra loading would likely be applied, in direct relation to the type and severity of cancer.
Exclusions can be reviewed at a later date, but in the first three years, cancer exclusions would be applied for life cover. From four to ten years post diagnosis, most cancers will be covered with varying sliding scales of loadings.
A high proportion of cancers will not be loaded once the client has been in complete remission for 10 years or more. Depending on the type of cancer, the client has the option to select an exclusion or loaded premium.
Brokers often ask why it is not possible to exclude only the specific cancer that a client has had, rather than applying broad cancer exclusions. In most instances this is not possible due to the high risk of metastasis – the spread of cancer to other body parts via the lymphatic system or bloodstream – and the increased risk of developing another form of cancer as a result of chemotherapy treatment.
The value in specialist insurers
While obtaining cover after cancer can be challenging, each client should be assessed on their unique circumstances. Every cancer survivor is different and there are many variables that need to be considered. Dealing with an insurer that specialises in extraordinary risk is essential to getting the best insurance cover for your client.
