Protect your family from cancer

If you develop cancer, you will face an exceptionally tough time arranging life insurance. John Fitzsimons examines how you can protect yourself and your family.

The statistics about cancer can make for some pretty grim reading: one in three people develop a form of the disease during their life, with someone in the UK diagnosed with one of the 200 types of cancer every two minutes. However, with methods for detection improving, and survival rates on the rise, contracting the disease is not the death sentence it once was.

Despite these advancements, former cancer patients still face an exceptionally tough time in arranging various financial products, with life insurance often proving the most elusive of all. However, while it is not the easiest product to access, it is not impossible.

If you're cancer-free...

First things first - if you're (relatively) fit and healthy at the moment, and you have financial dependents (such as a partner or children), it is essential to take out life cover now. Otherwise, should the worst happen, the range of options open to you contracts considerably.

If you're really worried about developing cancer, Virgin has launched a special cancer-only insurance policy, Cancer Cover, with built-in life cover and terminal illness cover  - a product it claims is unique in the UK.

Read 'How to pick the right life insurance policy' for the best guidance on what you need to consider to get your life covered.

If you have had cancer, you may be in for a wait

According to Cancer Research, cancer patients stand little chance of being approved for a policy until two to three years after full recovery. And when the policy is first issued, the initial premiums are likely to be high as a result of the perception that such a client poses the highest risk.

The first thing to be aware of is how the insurance company will base its decision. If granted permission, they will contact your doctor or hospital to get hold of the salient details about your condition. They may also request a medical examination.

Each case is unique

Unsurprisingly, providers will treat each form of cancer differently, with lung cancer the most problematic. You will most likely need to have been given the 'all clear' for at least five years before an insurance provider will even consider you, with the likelihood of very high premiums should you actually get through.

The situation is also complicated with former sufferers of breast cancer, as providers will take into consideration the 'staging system'.  At stage one, you are most likely to be accepted soon after treatment, albeit with higher premiums, while at stage two a decision may be deferred by up to five years after treatment. If you are a stage three patient, the decision will be deferred for five years, and at best you will benefit from high, temporary premiums. Stage four patients are likely to be declined.

However, the situation is a little better for those diagnosed with skin cancer, particularly non-melanoma skin cancers, as ordinary rates for life insurance can sometimes be obtained, though a GP's report on the circumstances of the disease and its treatment will likely be required.

The strong arm of the law

Thankfully, there is also legal protection in place for cancer sufferers seeking protection products, in the form of the Disability Discrimination Act 2005. It includes special rules about insurance, with providers duty bound to use reliable medical information and consider all relevant factors when considering an application. In fact, if you have a form of cancer which is statistically curable or manageable, for an insurance company to refuse you cover or charge a higher premium may actually be illegal.

Before you do anything, former patients should discuss the situation with a hospital consultant to get a better idea of what the insurer is likely to ask for, and then only make informal enquiries with the providers, at least initially. Should you make a formal application, and be turned down, other providers will then take that refusal into account in their own decision, so it is best to hold off as long as possible.

Consider a specialist

Despite the various difficulties, many providers will at least consider your case, while there are actually some providers out there who specialise in such protection. Specialist life insurer Partnership, for example, deals only with clients with impaired health, particularly those that are generally considered uninsurable.

What is clear is that it is near impossible to do this on your own.  In order to be sure of where you stand, and who is most likely to be able to help, a specialist IFA should be your next port of call.

More: How to pick the right life insurance | Think twice before you cancel your life cover

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