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We are taught from a very young age to plan for success, yet no one teaches us to plan for failure or the unexpected. Nowadays it is even worse, we don’t even let our kids fail, they all get a medal in the school carnival. Unfortunately, this is not reality, sometimes unexpected health events occur which can knock our plans around. 
This places financial pressures on people and their family, it may result in financial detriment at no fault of their own. No one is there to bail you out, apart from the planning you put in place prior to receiving the shocking news.
As a financial adviser, I have the privilege of working with different people. I see the difference planning can make to the lives of those who are unfortunately struck down with illnesses such as cancer or mental health conditions. Regrettably, I am often called upon to assist those who have not put appropriate planning in place. Often people expect a miracle from a financial adviser or believe Centrelink or their health insurance will come to the rescue. At these times I am often the bearer of bad news.
What should you consider when planning your finances?
People often overlook potential downside risks, this occurs in all aspects of life. Many fail to take into consideration what will happen to their finances or business if they are struck down with a sudden illness or inability to work.
Everyone should ask themselves, what will happen to my family/business if I pass away? Or what will happen if I am unable to work for an extended period?
Often these questions are only asked about the primary income earner. However, you also need to consider what would happen to your spouse in such an event, even those who are not working. Those with young families need to pay particular attention here, who will look after your children if your spouse is unable to care for them?
Those who are initially diagnosed with a critical illness rarely think about money first, but I can guarantee it is usually the second or third item on your list. At this point, people wonder how the bills will be paid, how the debts will be paid and how much their treatment will cost.
When planning for the worst, people need to consider what they would like to happen.
For example, do you want to have all your debts paid off, do you want a lump sum of money set aside to provide your family with a regular income stream, do you want to go on holidays and tick off the bucket list, do you need money set aside for your kids’ education?
What options are available to reduce financial pressures during illness? 
There are a number of measures people can implement to secure their financial future. The ability to earn an income is everyone’s greatest asset. Income protection will ensure that in the event of illness or injury you will continue to receive up to 75% of your salary whilst you are off work. This removes pressures of everyday living expenses and mortgage repayments. The payout period will vary from two years all the way up to age 65. Generally, a short waiting period such as a two-year benefit only provides a temporary fix and individuals need to consider what happens in the event of a long-term inability to work. Insurance premiums will be tax deductible so make the cover very affordable in comparison to other insurance types.
A colleague tells me about his experience with leukemia, when he was in hospital there were two types of patients, those with and without insurance. Those without insurance spent days in hospital beds worrying about finances and completing Centrelink application forms. While those with cover focused on their recovered, no matter the cost. People should plan for the worse, anything else is just a bonus.
For more information
To find out more about the options available to reduce financial pressures during illness, contact your local RSM adviser today.
This page has been prepared by RSM Financial Services Australia Pty Ltd ABN 22 009 176 354, AFS Licence No. 238282.
As everyone's circumstances are different and this article doesn't take into account your personal situation, it is important that you consider the above in light of your financial situation, needs and objectives, and seek financial advice before implementing a strategy.
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