Even with the NHS (and possibly private medical insurance as well), the simple fact of the matter is that it’s miserable being ill and the more ill you are the more miserable it is.
When your illness reaches a stage where it can affect your financial well-being, life can get really bad and, in a worst-case scenario, if you are diagnosed with a terminal illness without appropriate insurance cover, your last days can become even more stressful and their aftermath even more so for your loved ones. Making arrangements so that bills can be paid during a period of illness has obvious relevance to the self-employed, but even the employed and home-makers should take the issue seriously. While the employed may get some protection through employee benefits schemes, it may not be enough for your needs and similar comments apply to state benefits. Home makers may not earn an income but their time has a value and in the event of their illness and death, someone will have to stand in for them and what they do (cooking, cleaning, chauffeuring...).
Start with taking care of yourself
Given that prevention is usually a whole lot less hassle than cure (and often cheaper too), protecting your finances should generally start with protecting yourself. These days we all know the basics of a healthy lifestyle, eat well, drink plenty of healthy liquids (like water and unsweetened fruit juices) and avoid excessive alcohol consumption (or excessive consumption of anything), avoid smoking, take plenty of exercise and get a good night’s sleep each night. It’s a short list, but in the real world, many people may look on all of this as a case of “easier said than done”. There’s a certain element of truth to this, leading a healthy lifestyle can be challenging in today’s world, but even taking small steps, such as literally walking a bit further, can add up to a big difference and we have to point out, stopping smoking can make a big difference to your finances as well as your health.
Put protection in place in case of illness
What type and level of protection you’ll need depends greatly on your personal situation, however here are some ideas of what you should consider.
Pet Insurance - this may come as a surprise for the top of the list, but pets don’t qualify for state support and unexpected veterinary bills are unwelcome at any time. Do you really want to be worrying about paying them when you’re seriously ill?
Payment Protection Insurance - the infamous PPI. It may have had a very bad press, but the mis-selling scandal was exactly that, PPI was being sold inappropriately. For some people it may be a very useful product. It will take care of repayments towards credit products, such as credit cards and loans, under certain conditions. PPI cover can include spells of unemployment, which may or not be the case with other forms of cover.
Income Protection Insurance - PPI is sold for specific products and is often provided by the relevant lender (for an extra fee). IPI provides and income for you to use as you wish. It will typically pay out in case of illness or injury, some policies may also provide an element of unemployment cover, but this varies.
Critical Illness Cover - This insurance pays out if you suffer from certain serious conditions. Policies vary on what they cover, but typical examples include cancer and heart conditions.
Protect you and your loved ones in the event of your death
The standard comment about life insurance is that it’s there for the people you leave behind, which is true, but policies can also pay out in the event of terminal illness, thereby potentially making it easier for you to spend your last days in comfort as well as for your loved ones to manage financially and emotionally after your death.
There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk.