Everyone has a grim thought sometimes -- a scary question you wonder about but don't want to say out loud. Maybe yours is, "What if I get cancer?” Or, “What if I lose my job?”

While nothing may be able to stop those fears from creeping up from time to time, the right insurance coverage can help out if your worst nightmare comes true. After all, this is why insurance exists -- to help protect you and your family when disaster strikes.

Here's how insurance can assist during grim times.

What if I get cancer?

Probability of developing cancer by age 70

Lung & bronchus cancer 2.4%
Melanoma of the skin 1.1%
Stomach cancer 0.3%
Colon & rectum cancer 1.8%
Non-Hodgkin lymphoma 0.9%
Ovarian cancer 0.7% (among women)
Breast cancer 7.1% (among women)
Prostate cancer 7.7% (among men)
Source: National Cancer Institute, 2009-2011 data, based on probability from age 0.

Health policies

Thanks to the Affordable Care Act (ACA), health insurance companies cannot cancel or refuse to cover you if you have cancer or are a cancer survivor. They also cannot charge more due to a pre-existing condition, such as cancer.

If you have a workplace health insurance policy, it cannot be canceled due to a health condition.

The ACA also prohibits health insurance companies from putting a lifetime limit on benefits you can receive.

Even with an excellent health plan, you will have out-of-pocket expenses, such as deductibles, co-insurance and prescription medicine copays.

If you want additional protection, critical illness insurance can supplement your main health plan. It pays out a lump sum benefit after a diagnosis of a certain critical illnesses, such as cancer, and you can use the money as you see fit. This could pay for your insurance deductibles, transportation, child care or even a vacation. Read more about critical illness insurance.

Life policies

If you already own a life insurance policy, you do not have to tell the insurer that you have cancer, or any other illness. The insurer cannot cancel your policy or change your rates because of a diagnosis.   

If you don't have life insurance, you won't be able to buy one during your cancer treatment. If you have successful treatment, shop around for life insurance quotes after a few years. Life insurers will want to see your medical records showing that you responded well to treatment in order to offer you a policy.

Here are tips for buying life insurance after being diagnosed with cancer.

The pitfalls of AD&D

Be aware that an accidental death and dismemberment (AD&D) policy will not pay out for death due to cancer. AD&D policies cover death from incidents like car wrecks and other accidents.

What if I lose my job?

Losing your job usually means losing your benefits, such as your job-based health insurance and group life insurance.

Health insurance benefits typically end on your last day of employment or the end of that month. You'll want to find replacement coverage in case there's illness in your family. But you also want to avoid potential federal penalties for being uninsured for more than three months. ( Read about penalties on Healthcare.gov.)

Your options for health insurance are:
  • Move to spouse's group health insurance plan.
  • Continue your workplace plan through COBRA.
  • Buy an individual/family policy on your own.
  • Find a new job with health insurance benefits.

If you are married and your spouse has a health insurance plan that allows spouses to be added as dependents, a special enrollment window (typically 30 days) should open up when you lose your job-based health coverage. With this option, your spouse's group health plan should be effective no later than the first day of the month following the request for your enrollment.

Unless you lose your job due to "gross misconduct," you should be offered COBRA continuation health coverage if your employer has 20 or more employees. Here's what to know about your COBRA rights.

Under COBRA coverage, you'll pay the full premium plus a possible 2 percent administrative fee. Your employer will no longer chip in. You can buy your previous employer's health insurance under COBRA for 18 months after your employment ends. (COBRA can last longer under other circumstances, such as loss of coverage due to divorce.)

Buying an individual/family plan yourself is another option.  The loss of health coverage due to job-loss opens up a special enrollment period for this, too. You can buy a plan through your state's marketplace, through a health insurance agent or directly from an insurer.

If you're able to quickly get a new job with health benefits, you can enroll into the new employer's health plan - but some companies require a waiting period of up to 90 days before the plan starts. You can cover this gap with COBRA.

Auto policy savings

There may be a small savings associated with losing your job. If you drive less due to your unemployment, get a job closer to your home or start working from home, you may qualify for a low-mileage discount from your auto insurer.

Find out what other discounts you might qualify for with Insure.com's car insurance discount tool.

What if I get a divorce?

Probability of getting divorced

Percent of first marriages ending in divorce
Men 42.4%
Women 46%
Percent remarrying 
Men 65.3%
Women 66.1%
Percent of second marriages ending in divorce
Men 35.2%
Women 37.4%
Source: U.S. Bureau of Labor Statistics, October 2013

If you're divorcing, be ready to make changes to all your policies, and possibly buy new coverage.

Health policies

If your spouse carries the family health insurance through work, be careful. A change in marital status, such as a legal separation or divorce, allows that person to make health plan changes, and that means your ex could cancel your coverage.

If you're the one with health insurance through work, you can cancel your ex from your health insurance plan.  Here's more on protecting yourself from insurance revenge during divorce.

In some states, such as California, there are laws that prohibit either party from canceling any insurance during a divorce.

Life policies

A divorce court may require you to keep or obtain life insurance with your spouse as the beneficiary, especially if you have children.

Unless court orders require you to keep your ex-spouse as a beneficiary, remember to change the beneficiary of your life insurance policy.

Tips for other policy types

Once you have separate households, you'll need to untangle homeowners and auto insurance policies.

If you move to another residence, obtain a new home or renters insurance policy and have your name taken off your previous policy.

Notify your car insurance company if you move - you'll likely get a new rate based on your new address. You don't want to be on a car insurance policy with your ex because you don't want to be liable for his or her actions.

What if my spouse dies?

Probability of dying within one year

Men age 30 0.1%
Women age 30 0.1%
Men age 40 0.2%
Women age 40 0.1%
Men age 50 0.5%
Women age 50 0.3%
Men age 60 1.1%
Women age 60 0.6%
Men age 70 2.4%
Women age 70 1.6%
Source: Social Security Administration

Life policies

Find out if your spouse had group life insurance at work and/or an individual life insurance policy.

With individual life insurance, you don't need to know the policy number to make a claim, only the life insurance company name. Contact the insurer to get claim paperwork.

If your spouse was a veteran, contact the Department of Veterans Affairs (VA) for information on death benefits. Do so before burial, since the VA may offer burial benefits and a free headstone.

Health policies

 If your spouse carried the family health insurance through his or her workplace, you'll be eligible for COBRA continuation coverage and also a special open enrollment period to buy individual/family health insurance.

If you have a job, the death of a spouse allows you to make changes to your group health plan. You're able to drop your spouse if he or she was on your policy, or enroll in coverage if you were previously on your spouse's health insurance.

Home and auto policies

Inform your home and auto insurance providers of the death of your spouse so the policies can be updated with your name only. See how to change names on policies after the death of the policyholder.

What if I become disabled?

If you're lucky, you'll have disability benefits through work or your own disability coverage. Disability insurance partially replaces income lost while you're unable to work for an extended period due to an accident or illness.

Group disability policies generally pay  40 to 60 percent of your base income if you become disabled. There may be a benefits cap, such as $5,000 per month.

Chances of becoming disabled

A healthy 25-year-old female has a 24% chance of becoming disabled for 3 months or longer during her working career.
She has a a 38% chance that the disability would last 5 years or longer.
A healthy 35-year-old male has a 21% chance of becoming disabled for 3 months or longer during his working career.
He has a 38% chance that the disability would last 5 years or longer.
Source: Council for Disability Awareness

If you have short-term disability coverage, benefits typically last up to three months; a long-term disability policy can last for up to two years up or until you turn age 65, depending upon the terms of your policy.  For any disability policy there is generally a waiting period before the benefits start.

Also, check to see if you're eligible for Social Security disability benefits from the government. The Insurance Information Institute explains that SSI disability benefits “can be paid to workers whose disability is expected to last at least 12 months and is so severe that no gainful employment can be performed.

If you were disabled while on the job, you likely qualify for workers compensation benefits. Normally workers comp pays your related medical expenses as well as a portion of your income if you can't go to work.

Health policies

By law, you can't be rejected for health insurance due to a pre-existing condition. If you're unable to work and lose your group health insurance, you'll be eligible for COBRA continuation coverage. Or you could buy your own health plan.

Life policies

Life insurance is hard to secure when you have a disability, so if you have a policy already in place make sure to keep up the payments so you don't lose it. 

If you have a waiver-of-premium rider with your life insurance policy, see if you qualify to use it. Typically, if you're disabled for a certain period of time, this rider allows you to stop paying your monthly life insurance premium for the duration of your disability while still keeping your coverage. Here are the nine most useful life insurance riders.

What if I cause a terrible car accident?

In 2012, 33,561 people in the U.S. died in motor vehicle crashes, according to the Insurance Institute for Highway Safety.

If you're at fault for the death of passengers in another vehicle or a pedestrian, the bodily injury liability portion of your car insurance coverage will pay out, up to your limits.  Bodily injury limits are per person and per accident, such as $25,000 per person and $50,000 per accident. If you have low limits, they could easily be exceeded in a serious accident -- leaving you personally responsible for any outstanding expenses.

If you have personal injury protection (PIP) or medical payments (MedPay) coverage, this typically will extend to passengers in your car who are injured or killed - regardless of fault.  Again, if your insurance limits are exceeded, you will be on the hook for any remaining expenses.

More from Insure.com

Understand short-term disability insurance

The basics of long-term disability insurance

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