Wednesday, 23 January 2019
BREAKING NEWS

How to prepare financially for long-term illness

British life expectancy continues to increase, but the same cannot be said for the quality of health older people are likely to enjoy in those years.

The British Heart Foundation (BHF), a charity, said last week that the number of diabetics will rise from four million to five million by 2035.

Diabetics are four times more likely to have a stroke or heart attack than non-diabetics. The projected increase in diabetes rates means the number of people having strokes and heart attacks as a result will rise 29pc by 2035.

The charity has called for a change in British lifestyles to prevent this.

Simon Gillespie, of the BHF, said: “We can only reverse this trend by taking bold action to tackle obesity and inactivity, especially among young people.”

But what can you do to prepare financially for long-term illness?

The National Health Service (NHS) can help with the physical side of illness, but won’t be able to provide for you financially if you need to take prolonged periods off work.

Some long-term illness can mean you might not be able to carry on your previous job even after recovering. An HGV driver, for example, may not be permitted to get behind the wheel of a lorry after suffering a heart attack.

State benefits will provide some financial help, but if you are working full-time or have a family to support then these are likely to be too small to cover your outgoings.

This is where insurance can help. There are three types of cover that can be useful: income protection, critical illness insurance and health insurance.

Income protection, or permanent health insurance, will give you a small salary if you cannot work, which lasts until you retire or the policy ends.

Critical illness insurance will pay a lump sum if you contract a serious illness such as cancer or a stroke.

Health insurance, also called private medical insurance, will pay out for the cost of medical treatment.

You may have some of these insurance deals through your employer. If not, it may be worth considering if these kinds of deals are right for you.

Setting money aside also helps provide a buffer against long-term illness. Having three months’ salary in the bank, if possible, is seen as a good rule of thumb.

Steve Bryan, of The Exeter, an insurer, said: “Critical illness cover can provide a lump sum to manage the immediate impacts of an illness but income protection is generally better suited to long-term illnesses.

“Some income protection products offer cover for decades, allowing sufferers to focus on their recovery without stressing about whether the mortgage will be paid.”

Source: https://www.telegraph.co.uk/insurance/health/prepare-financially-long-term-illness/

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