Current imaging-based cancer screening approaches provide useful but limited prognostic information. Complementary to existing screening tests, cell-free DNA-based multicancer early detection (MCED) tests account for cancer biology [manifested through circulating tumor allele fraction (cTAF)], which could inform prognosis and help assess the cancer's clinical significance. This review discusses the factors affecting circulating tumor DNA (ctDNA) levels and cTAF, and their correlation with the cancer's clinical significance. Furthermore, it discusses the influence of cTAF on MCED test performance, which could help inform prognosis. Clinically significant cancers show higher ctDNA levels quantified by cTAF than indolent phenotype cancers within each stage. This is because more frequent mitosis and cell death combined with increased trafficking of cell-free DNA into circulation leads to greater vascularization and depth of tumor invasion. cTAF has been correlated with biomarkers for cancer aggressiveness and overall survival; cancers with lower cTAF had better survival when compared with cancers as determined by the higher cTAF and Surveillance, Epidemiology, and End Results-based survival for that cancer type at each stage. MCED-detected cancers in case-control studies had comparable survival to Surveillance, Epidemiology, and End Results-based survival at each stage. Because many MCED tests use ctDNA as an analyte, cTAF could provide a common metric to compare performance. The prognostic value of cTAF may allow MCED tests to preferentially detect clinically significant cancers at early stages when outcomes are favorable and this may avoid overdiagnosis.