The Financial Effects of Cancer – What to do when the Money Stops

by George on March 16, 2013

Getting on with Life

We live, we work, we earn, we manage and then we are told we have got cancer. While medical science improves – better detection, more cases giving a larger client database for doctors to work out an effective treatment, better technology and new drugs, the financial remedies have not changed so much.

As an employee, you are likely to have some built-in benefits as part of your employment package. Employers vary hugely in their generosity here, but most employment contracts will pay full wage for 3 – 6 months dropping to 50 per cent (basic) earnings after that with discretionary payment of wages after 12 months. From 3 years of doing monthly pension surgeries at employers’ offices, it seems practically nobody ever looks in their Staff Benefits Handbook which explains the exact benefits provided by their employer and how it reacts with State Benefits, in particular Incapacity Benefit

Financial Advisers have to have knowledge of State Benefits for their professional exams and especially when advising elderly or vulnerable people for Equity Release or Long-term Care advice for which they have to pass specific exams. Financial advisers are unlikely to be specialists in State Benefits – they have to earn a living like everyone else.

If you are self-employed which form an increasing part of the working population, you will still have access to State Benefits which are applied for online.

Now What?

When you are diagnosed, the hospital concerned will give you leaflets of local cancer charities where the most common one is likely to be MacMillan Cancer Care Their publications list is huge, they have advisers who will help you claim State Benefits and may even offer you a small grant, if your savings are modest. For claiming any state benefits, my first choice would be to contact them but do a little bit of homework first – it will save their time as well as yours.

But for financial advice? If you have a financial adviser, they ought to be able to help but again, help yourself first and the following list should help.

How long will you be off work for?

Apart from surgery which can be a quick cure for cancer, the effects of RT and chemo therapy tend to be cumulative. In my own case, I did not go into the office for 6 weeks but the longer the treatment goes on the worse you feel.

Will you still be Paid?

Can someone reliable handle your work or your clients when you are too ill to work? Clients will probably not appreciate your seeing them when you look like death warmed up, but it’s your career or livelihood at stake. It’s a difficult choice between keeping your clients happy and knowing your or your colleague’s limitations. Delegation is the key issue here and it’s interesting to see what clients you keep and what ones you lose when you are out of the picture for a while.

What Insurance do you Have?

Permanent Health Insurance will pay an income after a deferred period which can be 1 month to 24 months. Critical Illness Insurance will pay a lump-sum after diagnosis of a specified illness where cancer is one of the main conditions covered. Can’t afford these? Can you afford not to have them? You can only buy them when you are working, healthy & basically don’t need them. Been diagnosed? It’s too late and don’t try and fiddle the proposal form please – insurance companies aren’t stupid.

If you work for a decent employer, you may be able to buy insurances far cheaper than buying them individually, via the Employee Benefits Scheme.

At the very least, go back and reread the paperwork you got when you took the policy(s) out. If you bought it online on the basis of a cheap premium, you may be in for a surprise.

The comfort of having insurance greatly aids recovery and in a former self-employed client’s case, enabled him to take 3 months off to recover from his cancer. He couldn’t afford insurance to cover all his mortgage but the cover he bought enabled him to keep his family home.

Pounds, Shillings & Pence

Which brings us the crunch point. The exercise is quite simple - money coming in, money going out. Pencil and paper is fine or use a spreadsheet if you prefer, but “When will my money run out?” tends to be at the bottom of most people’s worries. There is no rocket science here. Writing it out shows you when things will start to get difficult and if it’s any consolation, the UK State Benefits system is considered to be quite generous compared to other countries. Ideally you should have your budget information up to date already and if you have a financial adviser, you should be having annual reviews to keep things current.

Hopefully you will have an Emergency Fund for times when money stops coming in. Most people have 3 months earnings for this. Having done the above exercise a few times over the years, it is surprising how often one realises that one has more than one originally thought. If it’s the opposite and you are in deeper trouble than you realised, well the wake up call was probably a good thing.

So What Happens Now?

With most of my cancerIFA referrals, going through the above exercise (usually over the telephone) is enough to get people to face their situation. The exercise is scary, but utlimately quite simple. My own referrals tend to come from my GP, other financial advisers and via Twitter or the Web. If you have a financial adviser, then a meeting with them is strongly recommended and if you don’t have one try unbiased.co.uk

The important point is to do the exercise and if you think about it, Why wait until you have cancer? Regulated advice may not be needed if you just want to know your financial vulnerability to a really bad piece of news. And it is good to know where you stand.

Feel free to call me, or for someone who probably writes about cancer more than I do, see Chris’s Cancer Blog

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