MONIE Orchards - Personal Financial Planning
Using the Building Blocks to Answer the Essential Questions

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What if I become sick?

This is a topic that is VERY country specific, and therefor I will deal with it only in generic terms here. Like death, illness is also not a topic that people generally like to talk about. The one good thing about CoVid19, is that it will force us to think more seriously about our mortality.
There are various possibilities when you become ill, which covers the range from a 24 hour stomach flu, to a lifelong incurable disease like Alzheimer's. Let's look at some options:
You become ill and recover
In the normal course of life, we become ill, we become better, and we go on. There are two different ways in which this can affect you.
First, you need to be able to pay the doctor's bills, which might be small or they might be large. In the world that we live in today, if at all possible, one should have some kind of medical cover, especially for large expenses. The doctors and hospitals can do wonders in treatment, but very often the treatments can become very expensive very quickly. Use a broker to do a thorough review of the healthcare policies available in your country, and make sure that you (and your family if applicable) are at least covered for major events like pregnancies, accidents (car and otherwise), cancer, diabetes, etc, etc.
Second, you start loosing income. If the illness lasts longer than your number of sick days that you have at work, you are going to need some way to deal with the lack of income. Two ways to do that, is to have enough savings to survive on, and also to have insurance that will replace your income once needed. These policies usually only start after a month or six, which means that you need to be able to survive on your savings until the waiting period is over.
Very often a disease is very treatable, but it is expensive, and recovery is time consuming. To add financial worries to the recovery, just makes things all the worse. Financial worries can also lead to longer recovery times.
But you eventually recover. What happens when you don't recover, I cover in the next paragraph.
You become ill, and stay ill, and don't die
Unfortunately, we do not always recover from our illnesses, and sometimes need to live with, or suffer from an illness for a very long time.
During your earning years, various illnesses can lower, or completely eliminate, your ability to earn income. Once you have retired, unexpected disease, or frailness can eat into your retirement nest egg very quickly. The difference to the scenario that I described above, is that this situation is permanent, and you can never go back to your income potential. Over and above that, you also need to pay for the medical care that is involved. End of life care can be very expensive especially if you become frail, or suffer from a wasting disease.
There is no single, simple solution to this need. Options include
- Long Term Care policies
- Unemployment insurance policies for the scenario where you are still in your earning years
- Dread Disease cover (typically for terminal diseases)
- Retirement homes, and assisted living facilities. These vary GREATLY in the benefits that they provide.
With the aging population around the world, especially in developed economies, this is going to become an area of greater importance. As people live longer, long term diseases are becoming more and more prevalent - Alzheimer's, Parkinson's, Dementia, and just plain old age itself.
Something that is also becoming much more necessary, especially in certain jurisdictions, is a living will, or even better, an appointed person to make your life and death decisions when you no longer can. "Switching off the machines" is another of those very difficult discussions that needs to be had. And it needs to be had before you are on the machine. Don't delay.
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