I hate jumping into a life insurance topic like this without all the facts but, heck, that’s why they call them rumors. Historically one of the toughest parts of underwriting has been, especially for cancer, the insistence of a one year waiting period post treatment, or the period where the company applies a flat extra premium for 2 or 3 years post treatment. This is especially a scourge for over 50 life insurance where premiums are larger anyway and flat extra charges often lead people to have to be under insured.
By the book, which is how almost all life insurance companies do business, even if you have a stage 0 breast cancer in situ that is surgically removed with no other treatment because it was completed encapsulated, companies have always made you wait a year before offering an approval. The one exception to that was US Financial when they were still around and they would allow an approval at six months out. In the case of the breast cancer described above or maybe a low stage and grade prostate cancer post radical prostatectomy, the truth is there really is no logic to the waiting period or the flat extra per thousand charge.
After writing a melanoma case last year that we got approved at standard plus 2 months post treatment I kind of thought something was up. Even the lowest stage and grade melanoma used to be a 3 year flat extra charge per thousand. Even when the cancer has clearly been identified, contained and removed companies have been padding their pockets by saying that the 3 year flat extra charge is necessary because you never know when it might come back. The honest truth is that 20 years ago that may have been a fact, but today a person can come out of surgery and know for a fact that they have won the battle and the war. There is no real scientific, medical or mortality reason for the overly cautious one year waiting period or multi year flat extra charge in a lot of underwriting scenarios. Not all, but a lot.
This week the news started to leak out that a major A+ rated life insurance company was going make major underwriting challenges that would acknowledge that, especially cancer treatment, has advanced dramatically in the last 20-30 years. The early diagnosis and treatment advances have taken the guess work out of the prognosis. Doctors, and now it appears life insurance underwriters from at least one company, can look you in the eye post treatment and tell you that your 5 and 10 year survival rate linked to the cancer is 100% and that the chances of that cancer coming back are less than the chances of the population at large.
It’s true that doctors and underwriters have never been accused of being born on the same planet and most certainly weren’t brought into this world for the same purpose, but with this news we may see the first crack in that plaster. Could it be that medicine and doctors have progressed enough that life insurance underwriters are acknowledging them as a legitimate source of mortality information?
As I understand the basics of this rumor, the company is looking at low stage and grade breast and prostate cancer being approved just a few weeks post surgical treatment. In addition where this company would have added a $5 flat extra for up to 4 years, they will now issue at standard without the flat extra. In cases where there would have been a $7.50 flat extra for up to 3 years, it will now be standard with no flat extra and those cases that would have been $10.00 per thousand for 1 or 2 years will not be standard from the approval date. And the last part is that men over a certain age will be approved when they have prostate cancer and their doctor recommends watchful waiting. That is outrageously good news. I shopped that very situation two times in the last two years and found no companies that would consider approval for watchful waiting. None. Zero.
Now, before everyone with a flat extra starts jumping at the chance to dump it, let me get a hard copy of the instances this applies to and more importantly where it doesn’t apply. Keep in mind that this line of thinking makes sense when we are talking about a cancer, but makes no sense at all when we’re talking about drug abuse or alcohol abuse where the recurrence rate is known and has to be underwritten and charged for.
Bottom line. I had hoped to have the hard copy of this great news before I finished this post. I will definitely have it by tomorrow and will lay it all out. This is going to be great news for a lot of people applying for life insurance for the first time post cancer and a huge relief to those who have been postponed or are paying a large flat extra charge. Remember, someone paying a $5.00 flat extra on $2 million of life insurance is paying $10,000 extra a year. If you have any questions or are currently postponed or paying a flat extra for life insurance because of breast or prostate cancer, call or email me directly. Let’s talk. Also check this week for an update and more information.