Last Updated: September 21, 2009
There's nothing quite like an illness to wreak havoc on your financial plan. And that's especially the case when it comes to advanced cancer. "I unfortunately see the great amount of financial stress this disease can cause," said FPA member, Rick Fingerman, CFP®, founder and president of Financial Planning Solutions, Inc.
According to Fingerman, who also serves as the liaison between the Dana Farber Cancer Institute and the Financial Planning Association of Massachusetts chapter, "the financial planning issues are many and overwhelming when it comes to advanced cancer." Indeed, there are issues of work, life insurance, health insurance and debt and credit just to name a few. To be sure, you, your loved ones and support system need to focus on many issues at once. Here's a glimpse of some issues you must address:
The Chance to Plan
"Long before becoming ill with advanced cancer, you should work on your financial plan," according to Fingerman. "You need to have a good plan in place before you get sick," he said. "You should plan for the worst and hope for the best."
Make sure, for instance, that you have the appropriate amount of money in an emergency fund, the appropriate amount of life insurance and an adequate long-term disability insurance plan. In addition, review your estate plan, your will, health care proxy, durable powers of attorney and living trust. "Many people approach life as if cancer or illness won't happen to them, that it only happens to someone else," he said. "But it can happen to anyone and your financial plan needs to address the possibility that it could happen to you."
Cancer and Work
If you have advanced cancer and you're able to keep working, take advantage of this time to put your financial house in order. There may come a time when you can't work and you'll find it difficult to think about money while tending to your illness. "Many people become so depressed at some point they don't open their mail and the bills start to pile up," Fingerman said.
During this time (or tomorrow if you are well), check your employee benefits, including your short-term and long-term disability plans and your medical insurance, including whether you'll need to purchase health insurance under COBRA. It's probably a good idea to become familiar with federal laws that might apply to your situation, including the Americans with Disabilities Act, the Family and Medical Leave Act and the Social Security disability income insurance program. According to Fingerman, it can take up to nine months for Social Security to approve your application for disability benefits. Learn more about applying for disability benefits from Social Security.
Managing the Money You Have
Part of what you need to sort out, at some point, is how you will pay for your expenses. If you're income is insufficient, you might consider tapping various assets and resources including your retirement plan, life insurance, credit cards, entitlements from the government and home equity loans. Depending on your life insurance policy, you might be able to take out a loan, get an accelerated death benefit or a viatical settlement.
Managing Debt and Credit
It's quite possible that you have or will have a good deal of debt. "Many people with cancer ultimately have a great deal of debt and in some cases have to declare bankruptcy," Fingerman said.
According to Advanced Illness, a booklet produced by the American Cancer Society and the National Endowment for Financial Education, you need to protect your loved ones from having to pay off your balances when you die. That booklet recommends that you 1) keep all your credit card balances on cards only in your name, 2) get credit life insurance on the cards, if available and 3) consider getting credit disability insurance on the cards.
If you are or a loved one is among those millions diagnosed with advanced cancer and need some financial guidance, consider consulting with a financial planner who's right for you. Find a financial planner. In addition, consider reading the resources available on the American Cancer Society Web site.