Last year I was diagnosed with stomach cancer, which was removed. Can I still get life insurance?
Assuming that you do indeed start a family in the next three years, you're right to think that life insurance should be a part of your planning. Unfortunately, though, given your recent health history, you probably won't have many coverage choices — at least for the next few years. That's because life-insurance companies evaluate you on personal information such as your age, occupation and health to measure your risk as a potential policyholder. And having a pre-existing medical condition like cancer makes it unlikely that you'll get coverage at all.
The goods news, though, is that your ability to purchase life insurance will dramatically improve if you stay healthy for the next several years. Most companies will sell cancer survivors policies at normal rates if they've had a clean bill of health for at least five years, says Jack Dolan, a spokesman at the American Council of Life Insurers.
Luckily, in the interim, you already have a policy provided by your employer — even if it's inadequate for your future needs. (Certainly some is better than none.) And if you should lose your job, you can probably convert the group insurance into an individual policy, says Gary Webb, president of FirstQuote.com, an insurance-provider Web site. Chances are, however, you're going to pay quite a bit for it, perhaps as much as four times the premium of someone who never had cancer. Nevertheless, it's probably a smart thing to do, since it won't require a medical exam. And then, if you start working at another company that also provides a life-insurance benefit, you can hold on to the old policy and have the combined coverage of the two.
If you do decide to seek additional coverage on the open market, your best bet is to look for insurance companies that specialize in providing insurance to people with medical conditions, or even more specifically, cancer. These companies can better evaluate your case on an individual basis. Just be sure that you go with a company that's rated A or better by A.M. Best or Standard and Poor's, says Webb. Even with these insurers, however, you might find that you can't get coverage until you've remained cancer-free for two years or more. And if you can get a quote from a specialty insurance company, be sure to compare it against what you might pay for a conversion policy from your employer.
Our life-insurance calculator can help you estimate just how much life insurance you might need in the future. But our advice is to stick with your current policy for the next few years. Given the difficulty you're likely to have obtaining extra coverage in the meantime, you're better investing the money you'd have spent on additional insurance premiums. After all, planning for retirement and, eventually, college for those kids you want to have is important, too. And the best part is, you can get started without waiting for some insurance company's approval.