Life insurance after a cancer diagnosis: what is covered

If you have had cancer, you can sometimes still take out life insurance, but the diagnosis itself may be excluded and the terms are likely to be harder than for someone without it. People who have recovered from cancer may be asked to provide detailed medical information and attend a medical examination before taking out a new policy, and may face higher premiums and restrictions on the maximum sum insured¹.

The picture is very different if you already hold cover. Once a policy is in place, the premiums cannot be increased, and as long as you made full and honest disclosures on your application and keep paying, the policy cannot be cancelled¹. There is often no need to tell your life insurer if you develop cancer after the policy starts².

The same split runs through the other protection products. Critical illness cover pays a lump sum if you are diagnosed with a serious illness, including many types of cancer, but a diagnosis you already had before the policy began is normally excluded¹. Private medical insurance bought after a diagnosis may not cover the cancer at all⁴.

Protection insurance after cancer: the cancer itself may be excluded

The central point for anyone with a cancer history is that protection insurance is priced on risk, and a condition you already have is not a risk the insurer is taking on. That is why a past diagnosis tends to show up in one of three ways: the condition is excluded from the policy, the premium is higher, or the maximum amount the policy will pay is capped. People who have recovered from cancer may face higher premiums and restrictions on the maximum sum insured¹.

Exclusions are not always about cancer alone. Family income benefit insurance, which pays a regular income rather than a lump sum, may exclude pre-existing conditions, dangerous activities, waiting periods, specific illnesses such as early-stage cancer or cancer diagnosed within the first 12 months, and self-inflicted injuries⁷. A policy that excludes cancer diagnosed in the first 12 months is not excluding your history; it is guarding against a diagnosis that was already developing when you applied.

Life insurance policies do not have standard wordings, and some have exclusions or make claiming harder if you develop a terminal illness⁸. Two exclusions appear widely and are worth knowing about even though neither relates to cancer: death from suicide is likely to be excluded during the first two years after the policy starts⁹, and on a joint life insurance policy, after a claim the surviving partner is no longer covered and will need their own policy¹⁰.

One tax point is settled in the reader's favour. Life insurance and most other long term insurance is exempt from Insurance Premium Tax¹¹.

How a past diagnosis affects what a policy will pay out for

Life insurance usually pays out only when you die, so a cancer diagnosis on its own does not trigger a payment¹. What a past diagnosis changes is whether the policy will pay when the death is linked to that cancer, and that turns on what you told the insurer and what it agreed to cover.

If you disclosed the diagnosis and the insurer accepted the risk, the policy pays out on death within the term in the ordinary way. If you did not disclose it, the insurer may treat the policy as void and refuse the payout². This is the single most common reason a claim linked to a pre-existing cancer fails.

Many life insurance policies also include terminal illness benefit, which means the policy could pay out early if a doctor says you have less than 12 months to live². Where that benefit applies, the insurer pays the full amount of the cover straight away, and you keep the money even if you live longer⁴. A single life policy will pay out on death or, often, if you receive a diagnosis that you have a terminal illness and will die within 12 months¹⁰.

Critical illness cover behaves differently, because it pays on diagnosis rather than death. It pays a lump sum if you are diagnosed with a serious illness, including many types of cancer¹. All policies include cancer, heart attack and stroke⁶. But if you wrap critical illness cover in with life insurance, a payout for the illness often reduces the amount paid out on death later⁹.

Private medical insurance: why cancer might not be covered after diagnosis

Private medical insurance is the product where a cancer history bites hardest, because it is designed to pay for treatment rather than to pay a sum on death or diagnosis. If you buy private medical insurance after you were diagnosed, cancer might not be covered by the policy, although any health condition you develop after you buy it should be covered⁴.

The reason is the treatment of pre-existing conditions. It is likely that treatment for some illnesses, including pre-existing conditions, will not be covered by an individual private medical insurance policy¹². Most long-term conditions that require ongoing treatment, such as diabetes or asthma, are generally not covered as standard¹³. Cancer is a notable exception to that rule in some policies, which is why the level of cancer cover varies so much between insurers and is worth checking line by line¹³.

What core cover normally includes is inpatient and day-patient treatment, full cancer cover and virtual GP access¹⁴. Comprehensive cover adds outpatient consultations and diagnostics¹⁴. All private medical insurance insurers cover in-patient care, cancer cover depending on the level of cover selected, private ambulance, surgery fees, oral surgery that is not dental, and diagnostic tests and consultations, to an extent¹⁵.

Two limits catch people out. Private health insurance typically does not cover emergency medical treatment¹⁶. And limits may be per-condition, per-year, or over the lifetime of the policy, with costs above the limit the customer's responsibility on all but the most high-end policies¹⁶.

Where cover for a pre-existing condition does not apply

Pre-existing conditions are excluded across protection products, not just private medical insurance. Many insurers will not cover any pre-existing medical conditions, and existing diagnoses will not be covered under a critical illness policy¹⁷. Travel insurance follows the same logic: insurers usually will not cover pre-existing medical conditions unless they have been declared and added to the policy¹⁸.

There are narrow exceptions. Some insurers make exceptions to the direct access rule for certain conditions, including muscle or joint conditions, mental health conditions where they are covered, and cancer symptoms¹⁶. Some policies exclude a condition initially but start to cover it after a waiting period or moratorium, often two years, provided there have been no symptoms or treatment¹³.

Switching insurer is where a pre-existing condition can cost you cover you already had. Some insurers might not cover illnesses or injuries you have experienced recently, or any conditions you currently have, even if these are covered by your existing insurer¹². Staying with an existing policy is often the only way to keep a condition covered.

The same principle reaches children's cover. Under one insurer's child cover, no cancer benefit is payable if the child has previously been diagnosed with any form of cancer, or had tests or investigations that led to a diagnosis of cancer before the policy start and within 90 days of the cover start date¹⁹. Children are not eligible for non-accidental death cover or Active Lifestyle Cover under that policy²⁰. Another insurer does not cover cases of cancer that are less advanced, in line with the ABI's Guide to Minimum Standards for Critical Illness Cover²¹.

Applying, and what happens if you do not disclose

When you apply for a new policy, the insurer will ask about your medical history. For a comparable condition, applicants are asked to provide full details of when they were first diagnosed, their medical history, and the specifics of their treatment and medication²². For cancer, the equivalent questions cover the type of cancer, how long ago treatment ended, and the insurer's own criteria⁵.

Treatment that starts after cover begins does not usually need to be reported unless the insurer specifically requests it, but it must be disclosed on any new policy²³. If you already have a life insurance policy and are diagnosed with cancer, the policy does not change, you do not need to tell the insurer, and your cover and premiums are unaffected⁵.

The consequence of getting this wrong is severe. If your family later needs to claim, your policy may be declared void and any payout refused². Insurers cannot cover certainties, so where the medical prognosis is that you will die during the policy term, they are legally entitled to refuse cover¹.

If a claim is declined and you believe the insurer acted unfairly, the Financial Ombudsman Service can look at complaints about critical illness cover and private medical insurance⁶.