This article is the third of a series on financial advice for families who are dealing with cancer, written by our guest author and renowned financial planner, Lovaii Navlakhi. It explains how to pay for cancer treatment without insurance. Cancer Awakens is very grateful to Lovaii for contributing so whole-heartedly to our site and to our readers. Over to Lovaii!
What happens when “C” arrives at your door unannounced and you have no medical insurance or critical illness cover? What can you do then?
Remember that life brings its own uncertainties – for you it may be cancer, while for someone else it may be a messy divorce or a sudden job loss. You’re not the first one to face such a trauma … and you won’t be the last! It’s time to absorb the blow, to think coolly and consider all your options.
Assess All Your Holdings
On one side, write down your assets: Bank savings, fixed deposits, mutual funds, equities, properties, insurance, PPF, etc. On the other, write down your liabilities: Loans, mortgages, and any other commitments. You have created your basic net-worth statement. Now you can see your situation clearly and make some decisions.
Estimate Treatment Cost
Ask your oncologist (and other patients who have had a similar type & stage of cancer) for a realistic estimate of what your treatment will cost. Ask about diagnostics, surgery, post-op recovery, chemo-therapy, radio-therapy and subsequent rehabilitation. Take into account the time when you may be on ‘leave-without-pay’. To be safe, add 15% to this estimate for contingencies.
How to pay for cancer treatment without insurance?
- Make a phased withdrawal plan, in line with your treatment schedule
- Identify where can you withdraw money from, with the lowest penalties and taxes
- If you are withdrawing from equities, ensure that markets are doing well and your equities have earned a decent return
- It is a good idea to dip into your debt investments, where there is no lock-in
- Withdraw a little more than your estimate, that cushion will give you peace of mind
- Start with from those asset classes/investments which allow partial withdrawals
- Provide for the family’s next 12 months’ expenses and keep this in liquid funds or your bank account
- Plan an exit route from investments that have lock-in clauses, penalties and/or taxes
- Provide for payment of income-tax on your withdrawals
- Don’t redeem all your investments from the same category/asset class; maintain a balanced portfolio as much as possible
- Don’t distress-sell or make impulsive decisions; get good advice from more than one person
- Don’t beat yourself up about drawing from your savings; they are meant for precisely these sorts of emergencies!
- Don’t worry about alternate income sources just yet; you need to stay calm and focus on getting well…so do your family members.
What if you don’t have enough funds for treatment?
This is rare, but it can happen. You may have no choice but to borrow money from your family, your friends or even your employers. Be open and honest with them. Share your net-worth statement and your treatment estimate/phasing with them. When they see that you have been rational, objective and are determined to recover, they will be more inclined to support you.
- If you are asking for a loan, be realistic about the repayment terms (don’t over-stretch yourself, they will understand!)
- If you are asking for a donation, be up-front about this too. You may find it awkward and embarrassing to begin with, but you’ll be surprised how often family and friends will rally around in an emergency (don’t under-estimate your personal goodwill or the strength of your close relationships!)
- There are many charitable trusts that provide funding and subsidies for needy patients, particularly from their own communities. Your hospital may be able to point you to the right people. Don’t be afraid to ask, but check that you qualify before you apply formally. Otherwise, it can be a waste of your time and effort.
What about my other goals?
You will have to prioritise (or even re-prioritise) your goals in consultation with your spouse and other family members. It helps to classify your goals into
- Essential: Health is no doubt your top priority, but it is not the only one. Home mortgage may be another.
- Important: Children’s education or your own retirement plans will probably feature here.
- Nice-to-have: Examples are your car, a second home or a vacation.
Cut down on expenses
It is quite surprising how much more you can save if you consciously cut down on expenses. Of course, you will maintain your essential living expenses while you can start shaving those ‘luxuries’ and ‘peripherals’. Once again, it is important to discuss with your family members first..
When can I start working again?
Your doctors will tell you when you are physically ready to get back to work, but you are the best judge on how much stress and strain you will be able to bear.
I will advise you to also have open discussions with your employers (most well-known companies are highly supportive in these areas, particularly if you have worked there for a long time):
- How much time can they give you to recuperate?
- Do you need to change your job profile, your timings…perhaps work part-time from home for a while?
The most important thing of course, is not to rush back to work. While resting and recovering at home, think happy thoughts and evaluate what else you can pursue, given your skills/interests/experience.
Finding your direction
Often, cancer becomes a ‘turning point’ to take an entirely new career direction. It is important to bring home the bacon, but more important that you do something that is really fulfilling, even if the remuneration is lower and the career track slower.
Request others to chip in
Sometimes, it makes sense for your spouse to join the workforce or for your children to take a break from their studies to support the family. Don’t neglect this option, even it is a painful one to consider. Evaluate who is best placed for this ‘interim’ role and for how long it will be necessary.
Talk to your family members, friends and colleagues for their help and advice, simply ask away – how to pay for cancer treatment without insurance. They may be able to suggest options and opportunities that you may not have thought about, considering they know you closely and are your well wishers.
- Cancer can be unsettling not just emotionally but also financially. How can you make a thorough estimate of your treatment costs after consulting your doctors and the hospital?
- How much medical insurance do you have? If it is inadequate, how will you fund the balance?
- Besides treatment costs, what are your key financial goals? What priorities do you need to readjust, to be realistic?
Lovaii is a Certified Financial Planner and Managing Director of International Money Matters Pvt Ltd. He features regularly on NDTV’s “30 Minutes to Wealth”, CNBC Awaaz and UTV Bloomberg. He is a panelist on various websites like moneycontrol.com, myiris.com, investmentyogi.com, etc. He also writes regularly for Outlook Money and Economic Times. He is the author of “A Guide to Retirement Planning” published for Outlook Money in 2007. He can be contacted on lovaii(at)immpl(dot)com. For more details, visit: www.immpl.com.
More from this series
|Title||About the article|
|Part 1: Are You Prepared?||When I ask myself “How many of those 250 million Indians (who will get cancer) are prepared for it?”, I already know the answer: very few. Then there is the ‘cost’ aspect to consider, which most people are even less prepared for.|
|Part 2: Critical Illness Cover||I met Ajay after a couple of years, at a dinner party. I knew him as a happy-go-lucky guy. But he looked solemn to me; upon enquiring, he said his uncle had passed away a few weeks ago, due to a galloping cancer.|
|Part 3: An Unexpected Visitor||What happens when “C” arrives at your door unannounced and you have no medical insurance or critical illness cover? What can you do then?|
|Part 4: How To Make Your Claim||Even if you are among the few who have planned for contingencies, when cancer strikes, it can still be scary and leave you confused and vulnerable. Let’s say that you have medical insurance along with critical illness cover. How do you go about claiming your expenses and redeeming your policy?|
|Part 5: Time To Reclaim Your Life||It has been a very difficult time for you and your family. You’ve dealt with all the turbulence, your treatment is over (at least for now) and it is now time to cope with life again. You have decisions to make, be it changes in work, life-style or managing your money.|