First my sincere regrets about your father's health. As for your question, let me see if I understand this right. Your father was diagnosed with an inoperable growth. It may be pancreatic cancer.
Your mother would like to spend $X a year to buy an ordinary life insurance policy on your father's life that would pay off at perhaps 100 times or more when he dies. If everyone who was dying could buy life insurance just before passing, that would be one hell of a deal, wouldn't it? Do you think any insurance company would knowingly sell it? If so, it would be insolvent in a matter of weeks.
That's NOT the way insurance works, and with a few exceptions, people who have a serious health problem are totally uninsurable for conventional life insurance.
Almost all individual life insurance is individually underwritten. The companies do NOT want to write a pig in the poke, but need to know some things about the insured so they don't pay off 100 to 10,000 to one. Thus they do underwriting. The more carefully they do it the lower their premium rates tend to be.
What is underwriting? The insurance company asks medical, family history, lifestyle, occupation and financial questions on the application for insurance. The underwriting process is designed to ferret out and help them categorize (and thus "properly price" or eliminate) not only those people who have serious illnesses, such as your father, but also various other health conditions (such as being overweight, smoking, excessive drinking, illicit drugs, etc.), or negative family histories (sometimes suggestive of increased likelihood of future illnesses, such as Huntington's disease, etc.), and occupations (such as demolition experts, etc.), and hobbies (such as hang gliding, building or flying in private planes, etc.), ar bad driving records, or being "over-insured" (relative to one's financial circumstances and needs) which history has demonstrated is likely to be associated with increased chances of "premature death" -- shorter than the normal actuarial life expectancy tables suggest. As part of that underwriting process, and depending on the size of the policy, and age of the policyholder, and other factors life inmsurance companies also may perform physicals, of various intensity -- a para-medical exam, blood and urine tests, full physical, even a stress test by a specialist -- and examine "attending physician statements" and medical charts. They ask financial questions to assess the need for the insurance. They do background checks in some cases. (Each life insurance company has its own underwriting rules, which vary significantly from company to company, and often from policy to policy.)
As a result of the underwriting process the life companies classify people, and determine which rate to charge -- the lowest -- "so called "Super Preferred", Preferred, Standard, or Rated and if so how much. The cost per dollar of life coverage may be as much as 10 times higher between Super Preferreds and highly rated. And in many cases companies decide they are not willing to insure an applicant at all. (Your father would be in that category.) The more careful a company is the lower its prices usually are.)
When applying for a policy -- and all "large" policies ask for answers to medical questions on the application -- does your mother plan to lie when asked if your father saw a doctor or is under treatment? I'd bet she is.
What happens then? Insurance fraud is a felony. But say the DA won't prosecute. If the insurance company does not pick up the lie, and there is no physical or the paramedical person or doctor also misses it, and the company winds up issuing the policy, and he dies within 2 years the insurance company treats the claim as "contestable" and will not pay until after it has concluded an investigation. And you had better believe the company will find out the facts in a case like this. And the company will not pay. (And that's often when the companies call the prosecutors.)
What if he dies after 2 years from policy issue, and the company has not caught on before then? (It has to act to "rescind" within the 2 years.) Then that's a different story, in some states, even with the actual fraud, she may collect, in others if there is real fraud perhaps not. (BUT she then may be the subject of criminal charges, as the statute of limitations is usually far longer than 2 years.)
What can someone in this position do? While there is a great moral quagmire you all are facing, I have heard of the following.
Some people try to buy types of insurance that do not ask any medical questions. What kinds are those?
1. Group insurance. Often employers provide group life insurance to their employees as a fringe benefit. At large firms this is done without any individual underwriting as the insurers base their assessment on the ages and health history of the overall employee population, assume that only reasonably healthy people are working, and as to new people, that insurance is secondary to employment, thus reducing potential adverse selection. Sometimes an employee can increase the amount -- particularly on "cafeteria plans" -- usually during an "enrollment window" at the annual election time.
2. Credit life insurance. If you finance a new car, or have a credit card, the banks, finance companies and card issuers love to sell optional insurance on the outstanding balance. (They earn huge commissions on it.) While that optional credit life insurance is reasonably expensive, dollar for dollar, compared to regular life insurance, as there are no health questions asked this is, for someone ill, a possible option. Perhpas he should buy a new car, fiance it, and take the optional life coverage.
3. There are certain plans of "senior insurance" that are advertised on TV and by mail that claim to do no underwriting at all. "You can not be refused." The plans sometimes are called "modified life". But these companies are not that stupid either. What's the catch? There is NO death benefit if the death occurs within 2 years, and the policies are typically issued only for reasonably low face amounts. The companies issuing this also charge a price per dollar of coverage that is VERY high compared to ordinary life insurance. They also hope that those who are sick and sign up die within the 2 years, and they make their money on the fact that its "convenience" attracts many people who are relatively healthy and don't realize there are lower cost alternatives for healthy people.
4. Finally, do not lie. Life is too short. And the possible money you may make by cheating an insurance company -- even if you can get away with it -- is rarely worth the shame and guilt that can result.
Good afternoon, my mom wants to take a life insurance policy out on my father. He's 63yo. Recently he's had some tests taken & was told everything short of having pancreatic cancer. He wasn't specifically told he had cancer, but he has a growth in his pancreas that's inoperable. He been in pretty good health up to now & makes regular doctor visits. When applying for life insurance for a spouse will they have to take a physical? Are there companies that bypass the physical. Should she tell them about his condition w/his pancreas or not?