When diagnosed with a chronic illness you will of course be most concerned with your health and the effect of the disease on yourself and your family. Once you’ve dealt with the shock of being diagnosed with a chronic disease and made plans for your medical care, adjusting your financial plan is the next priority.
In fact, you can view a chronic illness diagnosis as one more life event that requires financial care, attention and planning just like buying a house, having a child, and entering retirement.
You Are Not Alone in your Diagnosis or Your Planning
As personal as a diagnosis can feel, remember that others have faced this before and you can learn from them. Learn as much as possible about the likely progression and symptoms of your illness and then use that information to create or adjust your investment portfolio and budget to prepare for projected costs:
- Will you require funds for home health care sooner than most?
- Will you need to widen doorways in your home for a wheelchair?
- Will you or your spouse need to retire earlier than you had planned?
The costs of a chronic illness can be very complex and certainly deserve thoughtful planning. Knowing you have been diagnosed with a chronic illness, you can explore strategies like these:
- Earmarking a specific amount of your invested assets for anticipated health care needs
- Shifting more assets to income investments, such as bonds, to compensate for any loss of work income
- Reviewing the costs of home health care, assisted living, nursing homes and adult day care in your area
- Looking for ways to cover the higher cost of specialty chronic disease drugs for which there is often no generic alternatives
It’s Critical to Draft a More Accurate Budget
After learning you have been diagnosed with a chronic illness, you’ll want to create a budget for the first 12 to 18 months living with your disease. You can look at current expenses and income sources vs. anticipated changes going forward. For example, while you may have less employment income over the long run, you may also have fewer travel expenses at first. And while you may have more medical costs, you may also have access to new forms of income such as disability benefits, the potential for medical-related tax savings, or insurance products with accelerated death benefits that pay a portion of your benefit while you’re alive.
Remember, There Are Many Benefits of Staying Employed as Long as Possible
On top of the obvious benefits of earning income, staying employed also lets you keep your group health insurance that is most likely better and less expensive than any policy you can get on the individual market. You can also enroll in group plans for long-term care insurance and enhanced disability coverage that generally do not require medical underwriting
Looking at Chronic Illness Diagnosis as One More Life Event To Make a Plan For
As with most things in life, we can’t control what comes our way, but we can very much choose how we respond. A sound financial plan is an excellent addition to a medical plan if you’re ever face to face with a chronic illness. That’s when you need a specialist like Iryss.