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Cancer Disrupts Physically and Financially

Cancer Disrupts Physically and Financially

| February 26, 2020

I was in Sunday School, which is where you find me most Sunday mornings, and like many of us, my class starts off with prayer and prayer requests.

This week, however, I noticed something I hadn’t noticed before, and interestingly the thing I noticed wasn’t anything different at all. Just like the week before, and just like the week before that one, I hear prayer requests about people courageously battling cancer. One by one, young people, old people, middle-aged people, all of whom were dealing with the diagnosis and treatment of cancer.

After several weeks observing, it occurred to me that this same scene might happen in churches and synagogues all over my area and probably your area, too, meaning that there are literally thousands of people just like us dealing with the impact of cancer.

According to the National Cancer Institute, it’s estimated that 1,735,350 new cases of cancer were diagnosed in the year 2018 alone.(1)

Confession time… Right about now my mind began to wander away from the teacher, and I kept thinking about not only the physical shock that those 1.7 million people but also the financial shock. Many were probably working parents just like Amy and me. What happens to their family income?

Months before the Sunday School scene, a friend told me about a friend of his who was battling cancer. I don’t recall what kind of cancer it was, but I remember these words that his friend shared describing his exit from a successful business, “From now on, beating cancer is going to be my full-time job.” This person, because of the terrible disease of cancer, took his focus off his prosperous career and business ownership and focused it on the sole duty of beating cancer.

The problem is that cancer doesn’t pay the bills.

It’s scenarios like this that might cause some of those 1.7 million people to file financial bankruptcy.(2)

In Lori Konish’s article, “This is The Real Reason Most Americans File for Bankruptcy,” she says that “66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work.” That’s well over half of US bankruptcies are caused by issues related to a medical condition – like cancer.

If medical issues like cancer are as big of a deal as the case I set before you, and if income is important to our financial well being, what can be done to help?

I have a few ideas for you to consider.

  • Group Long-term Disability Insurance may not be enough, and certainly short-term coverage only provides solutions in the first few weeks of disability. Even if you are one of the lucky ones to have a good long-term disability insurance policy through an employer, you should do the math on exactly how much benefit is paid through that plan to determine if it’s adequate.
    • It’s common to see group LTD plans pay 60% of salary (this may not include bonuses, commissions, or owner distributions, so double check). Further, if an employer pays for the benefit on the employee, the employee’s benefit at claim is taxable as income. Therefore the 60% feels a lot more like 45%!
    • Also, you’ll see in most group plans that the benefit has a monthly cap, maybe $5,000 or $7,500. This means that the employees making $100,000 or more are probably subject to yet another reduction in percentage income covered.
  • Medical conditions like cancer don’t always start as a total disability claim or end as a total disability claim, therefore, consider adding an optional residual or partial benefit rider that pays benefits even if it’s not a total disability claim.
  • Some of the newer disability income insurance policies address specifically complications from conditions like cancer. In particular, one newer policy will pay 50% more in the first year of a claim resulting from cancer, stroke, or heart attack.

So, what can you do?

The purpose of this article is to bring awareness of around medical conditions like cancer that could interrupt our desires to work successfully and earn income. To me people battling cancer are heroes because they devote their entire energy into fighting a terrible disease. Their fight becomes their job. Their crusade to win becomes their passion. And their profession and success become a memory. If you don’t have any disability income insurance coverage yourself or through work, check your options. I love how a fellow advisor puts it when he says, “Would you rather have a strategy (financial) that works only if you are healthy or one that works regardless of your circumstances?”

Lastly, if you do have a long-term benefit through work, consider supplementing it with a personally owned plan to round out the benefits to more closely match your actual income and lifestyle. This reminds me of another advisor who puts it this way, “Your medical bill insurance makes sure the hospital and doctor get paid. Wouldn’t it be smart to make sure you are also paid if injury or illness struck?”

We don’t think these things will ever happen, yet we see it all around us. It could happen to you and me, so don’t you think now might be a good time to consider the impact? Don’t you think now might be a good time to consider a solution?

(1)https://www.cancer.gov/about-cancer/understanding/statistics 

(2) https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html