If you incur medical expenses for cancer and have private medical insurance that covers cancer is the insurance payout considered taxable income?

No. You have already paid taxes on the money that you used to pay the insurance premiums.

I am an insurance agent that works for a company that sells cancer insurance. Your payouts MAY be subject to taxation if your premiums were paid through your employer, and they pre-taxed them. It is important to seek the advice of a tax professional to ensure that you report all necessary income.