Overcoming financial pain of the battle against illness

In bowel cancer awareness month, Edmund Tirbutt assesses the budgetary fallout that arises from dealing with such diseases.

If bowel cancer is treated early, there's a great chance of recovery. But survival can throw up its own financial problems. Just ask 32-year-old accountant Sarah Wills, who had a major bowel cancer operation in January 2012. Although she was able to resume her passion for playing the classical guitar two months later, a full-time return to work wasn't possible until November.

Initially, Sarah enjoyed the benefit of a generous sick-pay scheme, which meant she received her salary in full.But once that stopped in August 2012, she could turn to a £153,000 critical illness cover payout from Zurich Life. Without that, she says she would have struggled. She was able to use the cash from her insurer to pay off her mortgage on her home near Plymouth, and it also gave her valuable spending money.

"The policy was invaluable as it meant that I didn't need to worry about losing the house or running down existing savings when I wasn't earning," says Sarah.

"The money was in my bank account a month after I'd done all the paperwork. If you've got any sort of big liability which is going to be an expense, then you need the cover."

Sarah's policy, which she had taken out jointly with her 33-year-old husband Rob, cost £60.39 a month in premiums. That may sound a lot, but it also offered life insurance on the couple. Combining life and critical illness cover in this way can shave up to 15 per cent off the premium but the downside is that it can leave you uninsured. Sarah is likely to have to wait a couple of years before insurers feel she is again an acceptable risk for life cover.

For that reason, it can be worth considering paying for separate policies. In your twenties, £100,000 of standalone single-life critical illness cover can cost around £20 a month but by the time you reach your mid-forties, it can cost three times that.

The cover, which pays out a tax-free lump sum if you are diagnosed with one of a stated number of serious conditions, can be particularly good news for cancer sufferers because cancer now accounts for more than 60 per cent of payouts. The other main sources of claim are stroke, heart attack and multiple sclerosis.

Policy wordings for cancer are also more generous than ever before. But the exact terms can vary significantly between insurers.

For example, Legal & General covers all types of surgery and treatment connected to prostate cancer whereas many other insurers only make a partial payment if you actually have a prostatectomy.

Other favourable recent trends are that all major insurers now include children's cover for a proportion of the cover amount and some offer premium discounts to policyholders who are excluded for certain conditions.

Aviva, Ageas Protect, Friends Life and Zurich Life do this for both cancer and multiple sclerosis while Legal & General, LV= and PruProtect do it only for cancer. Alan Lakey, partner at Highclere Financial Services, a specialist adviser based in Hemel Hempstead in Hertfordshire, says: "None of them stipulate the amount of the discount as they calculate it on a case-by-case basis but in my experience it tends to be in the region of 15 per cent to 20 per cent."

In view of such significant cover differentials, the surest way of getting a policy best suited to your individual circumstances is to consult a specialist adviser and, as most of these receive commission from insurers, this need cost you nothing.

Such specialists can also help dispel important misconceptions that have traditionally prevented people from buying cover. Prominent among these is the idea that "these things only happen to other people".

According to consultancy Protection Review, which monitors a range of sources, the chances of suffering a critical illness before retirement age are as high as one in six. Another is the idea that critical illness insurers are always trying to wriggle out of paying claims. There was certainly some truth in this a decade ago, when only about 80 per cent of claims were paid industrywide. But guidance issued by the Association of British Insurers (ABI) in 2008 about dealing with non-disclosure more fairly, together with a much more scrupulous stance taken by insurers at the application stage, have seen average payout rates rise to more than 90%.

Mark Roberston, protection partner at Chadney Bulgin, a specialist adviser based in Fleet in Hampshire, says: "It's rubbish that they don't pay out although some clients still seem to believe this because of the bad publicity generated by some critical illness insurers in the past. If you disclose everything you are supposed to at outset, you are most unlikely to come unstuck."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
'We will fix it': mice in the 1970s children’s programme Bagpuss
Life and Style
2 Karl Lagerfeld and Choupette
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Graduate Recruitment Resourcer

    £20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

    Recruitment Genius: Telesales Executive - OTE £32,000+

    £18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

    Ashdown Group: Marketing Manager - B2B, Corporate - City, London

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Neil Pavier: Commercial Analyst

    £50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

    Day In a Page

    War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

    War with Isis

    Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
    Scientists develop mechanical spring-loaded leg brace to improve walking

    A spring in your step?

    Scientists develop mechanical leg brace to help take a load off
    Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

    Peter Ackroyd on Alfred Hitchcock

    Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
    Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

    Ryan Reynolds branches out in Woman in Gold

    For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
    Why Robin Williams safeguarded himself against a morbid trend in advertising

    Stars safeguard against morbid advertising

    As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
    The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

    UK horticulture industry facing skills crisis

    Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
    Hack Circus aims to turn the rule-abiding approach of TED talks on its head

    Hack Circus: Technology, art and learning

    Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
    Sevenoaks is split over much-delayed decision on controversial grammar school annexe

    Sevenoaks split over grammar school annexe

    If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
    10 best compact cameras

    A look through the lens: 10 best compact cameras

    If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
    Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

    Paul Scholes column

    Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
    Why Michael Carrick is still proving an enigma for England

    Why Carrick is still proving an enigma for England

    Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
    Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

    Tracey Neville is just as busy as her brothers, Gary and Phil

    The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?