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Protection brief: How advisers can cover for cancer

It is useful to know how the condition is underwritten to help manage client’s expectations and reduce non take-up rates


There are approximately 2.5 million people living with cancer in the UK, expected to rise to four million by 2030.

With over half of those diagnosed surviving for at least 10 years, all advisers at some point will speak to someone who has had cancer.

To help manage client’s expectations and reduce non take-up rates it is useful to know how the condition is underwritten for life cover.

Some of the important things to know are: the type/location of the cancer, the staging of the cancer, the grading of the cancer (if not known, the size of the tumour), what treatment has taken place, when the last invasive treatment was, and whether there has been any spread to lymph nodes.

Some cancers will differ but that list will give you enough to get a good response from insurance companies in most circumstances.

While cancer is present, standard cover is generally postponed and not offered. For stage 1-2 cancers, and also stage 0, life cover is likely to be available a number of years following successful treatment.

Cover may be available after one year for lower grading/staging cancers but could be two to five years for stage 2 and higher grades. Stage 3 and 4 cancers can result  in cover not being offered for five to 10 years, with some extreme cases even resulting in lifelong declines.

As most standard market providers use a “per mille” or “cash extra” loading on premiums (meaning they charge an extra premium for every £1,000 of cover), the cost for cover can become unaffordable for many people until years after recovery.

So are there alternatives? Yes. They may not be perfect but they can at least allow the client to have some cover, where otherwise they may have none.

Reduce the cover: If the premiums are too high, you can reduce the sum assured which will reduce the cost. Changing the term on most plans unfortunately will not make much of a difference.

Employee benefits: If an individual is employed and their company provides or is willing to provide a group policy, then group risk is a good option. However, not all employers will pay for this benefit, it does not help the self-employed and cover is only valid while in employment.

Non-underwritten life cover: There are some plans available that either cover accidental death only, or that provide cover with a pre-existing health exclusion. These are normally renewable plans though and the small print or the exclusions can, if not explained correctly, leave doubt as to when a claim will not be paid.

Over-50s life cover: This can be a good option for people who are over 50, except the sum assured is often low, so not suitable as mortgage protection. It also does not help younger clients.

Specialist policies: It is possible to write cover with a full cancer/tumour exclusion. While this is not ideal, it can sometimes present a more affordable option than paying hundreds of pounds per month. The argument being some cover is better than none.

Alan Knowles is director of Cura. Follow them on twitter @Kathryn_Cura & @AlanK_Cura



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