Critical illness: It could happen to you!

Doctor and Patient sitting talking about diagnosis'. The patient has her head in her hands

No-one likes to think about becoming critically ill or dying. However, statistics show that having the right type of financial protection for when you are seriously unwell is just as important as having something like life insurance.

Will you be affected?

In the UK:

100,000 people a year suffer from a stroke, according to the Stroke Association.

360,000 people are diagnosed with cancer each year, based on research by Macmillan.

100,000 hospital admissions each year are due to heart attack say the British Heart Foundation.

With numbers like this, it is a real possibility that you may suffer from a critical illness during your lifetime. If it were to happen to you, what would be the financial impact on your business and your family?

In 2018, Scottish Widows paid £72.5 million in critical illness claims. Cancer was the main reason for women making a claim (73% of all cases); followed by multiple sclerosis (6%), stroke and heart attack (5% each).

For men, 51% of claims made were for cancer, with the second most common cause being heart attacks at 20%.

Research from Pacific Life shows the risk of a 30–year–old being off work for two months or more before their retirement at age 65 is significantly higher than people might believe. 26% for men and 37% for women.

 

More likely to survive

In the 1960s, 7 out of 10 heart attacks in the UK were fatal. Today, 7 out of 10 people survive. Meaning you are increasingly likely to require protection that financially supports you in times of serious illness, as your likelihood of surviving a critical illness is higher.

It is estimated that around 1.4 million people alive in the UK today have survived a heart attack – approximately 1 million men and 380,000 women.

In the early 1970s the median survival time after a cancer diagnosis was one year, by 2007 it was six years, and by 2011 it was ten years.

2.5 million people are living with cancer in the UK.

 

The impact of a critical illness

In 2017, 131.2 million days were lost to sickness.

There were 541,589 deaths registered in England and Wales in 2018. The number of people claiming Employment Support Allowance as of February 2019 was 2.1 million. You could infer from this that you are 3 times more likely to need Employment Support Allowance than you are to die.

According to research conducted by Royal London, of those who were surveyed and referred to as Money Makers, high-income households, typically midlife individuals in the process of accruing assets to give them financial security, only 22% had critical illness cover and 10% had income protection. Meaning potentially up to 90% of this demographic had no cover in place to support them financially should they become seriously ill, despite their income level indicating they could probably afford to do so.

400,000 people living with cancer across the UK struggle to pay their household bills as a result of their diagnosis, according to Macmillian.

 

Self-employment

If you are self-employed, the impact on your ability to earn an income could be significantly impacted by a critical illness. If you are a sole trader, then your business may cease to trade if you became seriously unwell, thus putting a sharp halt to your income.

Even if you have employees within your business, what would the impact be if you were unable to work for 2, 6, 9 months or a year? Could it continue to run, providing you with a salary, or would there be severe ramifications for it’s day to day operation and ability to continue as a successful enterprise?

If you were no longer bringing money into the household, how would your family continue to pay the bills? There may also be additional costs incurred related to an illness on top of your regular expenditure. Your spouse may have to take time off their job to take you to hospital appointments, and you may need additional childcare. Not to mention the increased stress and overwhelm you and your loved ones may feel at that time – do you really want to add financial worries into the mix as well?

 

Finding the right solution

There are many ways in which you can provide financial protection for you, your business and your loved ones. Finding the appropriate solution will depend on your circumstances and the type of business you have. You can download our free guide on protection planning here to get more information on the different options you may wish to consider.

Our Life Centred Financial Planners take the time to really understand your lifestyle and business so that we can work with you to provide peace of mind and the right level of financial protection for the future. We offer a complimentary 1-hour consultation, so why not pop in for a chat to find out how we can help you plan for a brighter future.

 

Further information

If you found this information useful, you may also want to check out the following:

 

MRA help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in corporate solutions, cash-flow analysis, life centred planning and much more.

Business Consultants based in East Sussex we service clients across the South East, Sussex and Kent, including smaller towns such as Ashford, Battle, Bexhill, Bodiam, Brighton & Hove, Cranbrook, Crowborough, Eastbourne, Hailsham, Hastings, Heathfield, Herstmonceux, Lewes, Mayfield, Newhaven, Rye, Seaford, Sevenoaks, Tenterden, Tonbridge and Tunbridge Wells.

Sources:

https://www.stroke.org.uk/sites/default/files/state_of_the_nation_2018.pdf

https://www.macmillan.org.uk/_images/cancer-statistics-factsheet_tcm9-260514.pdf

https://www.bhf.org.uk/what-we-do/our-research/heart-statistics

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/sicknessabsenceinthelabourmarket

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/datasets/deathsregisteredinenglandandwalesseriesdrreferencetables

https://www.gov.uk/government/publications/dwp-benefits-statistics-august-2019/dwp-benefits-statistical-summary-august-2019

https://adviser.scottishwidows.co.uk/assets/literature/docs/2019-04-protection-claims.pdf

https://adviser.royallondon.com/globalassets/docs/protection/state-of-protection-nation.pdf

https://www.macmillan.org.uk/_images/cancer-a-costly-diagnosis-report-2019_tcm9-354186.PDF