Illness can wreak havoc on even the best-planned budget and throw your money management into disarray. Most people aren’t concerned about how sickness can affect their financial lives until they are in the middle of an emergency health situation.

Let’s look at some things you should consider when you’re thinking about life’s eventualities. Hopefully this will help to improve your state of financial readiness in the event of illness.

Health Insurance

Without a doubt, health insurance is a god-send when you’re facing a daunting medical bill. It allows you to hang on to your money while the insurance company picks up the tab for some of the cost of medical services and products. Check out these crucial questions relating to insurance:

– Are you covered for health insurance through your workplace?
– If you’re insured, how comprehensive is the plan?
– Would you have to pay upfront for more expensive services,
and then be reimbursed?
– Are there limits on amounts the insurance company will underwrite for
specialized services?
– Will it provide emergency care if you fall ill overseas; or allow you to
travel to receive specialized care?
– What is the amount you would have to pay out of pocket before you could
receive hospital services?

If you can’t answer these questions readily, have a discussion with your employer or insurance provider so that you’re clear what you’re covered for.

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If your employer doesn’t provide health coverage, it might be worth the extra expense for you to get your own health insurance plan, especially if you have dependents. Small business owners can also consider providing group health insurance for workers and family members, as this cost can have tax allowances, and be less expensive than an individual policy.

Here’s a tip- if your budget can manage it, how about saving the portion of the medical bill that was covered by the insurance provider? If you didn’t have the insurance, you would have spent that money anyway!

Sudden Illness

Developing a sudden debilitating illness can be more than just an annoying setback from your regular way of life. Sickness can be a major financial inconvenience if you haven’t prepared for it. Remove uncertainty by taking these things into account:

– Do you have extra cash at home so that you don’t have to stop
at the ATM before you seek treatment?
– If you live alone, is there a family member, friend or close neighbour
who can accompany you to deal with paying hospital bills and buying medicine,
if you’re not able to?
– Do you have enough money in accessible short-term accounts to
pay for emergency medical needs?

Prolonged Illness

Being very sick for an extended period can present other financial challenges apart from the obvious high cost of health care. Here are some questions to think about:

– Are you the only person with access to your bank accounts?
– If so, how would you get money to pay for your regular expenses?
– Would you still be paid if you had to be off work for more than two weeks?
– Do you have enough emergency funds saved to tide you over until you’re
back on your feet?
– If you’re self-employed, are there other people that can carry on the business
so that your income continues?
– If your illness prevents you from continuing your line of work, is there another
income-generating occupation that you can fall back on?

Incapacitation

This is a state where you are physically and mentally unable to carry out your affairs. You could be in a coma or otherwise unable to write or speak. If you haven’t made prior arrangements to deal with this medical possibility, your financial life could be serious jeopardy. Let’s consider some key questions:

– Do you have automatic deductions in place that would continue
to pay for life insurance, mortgage or investment savings plans?
– If you needed to dispose of assets to pay for your medical bills,
could this be done?
– Could you be sure that those who may have control of your money
would spend it according to your wishes?

Remember, the provisions in a will only take effect after you have died. If you have significant assets such as real estate and business interests, it would be advisable to speak to a lawyer about setting up document such as a living trust that would dictate your financial affairs in case of incapacitation.