An arm and a leg: could you afford the cost of a serious illness?
Aussies are living longer than ever before, but if you think that Medicare means you don’t need to worry about the cost of a serious illness, or about looking into a life insurance policy to help with expenses, think again.
A recent white paper released by insurer Zurich has shed light on the real cost of illness in Australia, and the “false sense of security that Australians live with in terms of their health, and their capacity to cope financially, in the event of ill health.”
In 2015/16, Australia spent a whopping $170.4 billion on health and while the Government picked up the tab for a lot of it, individual Aussies still footed $30 billion of the bill.
Because although it’s true that “healthcare in Australia is largely publicly funded,” there are still plenty of costs outside this funding system to consider, including GP and specialist gap payments, scans or tests outside of the public system and in some cases travel and accommodation.
How much does it cost to be chronically ill in Australia?
Let's take cancer as an example. According to the paper, there are 380 new cancer diagnoses in Australia every single day. Various types of cancer make up 19% of the “disease burden” in Australia, with 1 in 3 Aussie men and 1 in 4 women being diagnosed with some type of cancer before they turn 75.
Prostate cancer, the most common type in Australia, has an average lifetime out of pocket cost of $36,800, while breast cancer, the second most prevalent type, isn’t far behind with a lifetime price tag of $36,040. Head, neck and thyroid cancers were the most expensive, with lifetime costs averaging $95,460 out of the pocket of patients.
Image source: Zurich, Cost of Care white paper
Quoted in the paper, medical expert Dr John Cummins said “...whereas in the 1970s the average survival post cancer diagnosis was approximately 12 months, current survival rates are around 6 to 10 years and increasing. However, such interventions come at a cost. Out of pocket costs for surgery can run into the tens of thousands of dollars and radiotherapy can also be expensive.”
Income lost through illness
Another major cost that comes with being chronically ill is the loss of income it often results in - and not just for the ill person.
According to the paper, more than half of people caring for loved ones with cancer had to reduce their full time working hours or take leave and around 72% of carers “report a negative financial impact of caring.”
The average cost to the household of a cancer patient totalled $48,000.
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Is life insurance the answer?
So what does all this mean for you? Most life insurance policies come with cover for death and terminal illness, which gives the insured person a lump sum payment on confirmed medical diagnosis of a terminal illness, and some also cover total and permanent disability or trauma.
That means finding the right life insurance fit could be a good move for Aussies concerned about covering the costs of a terminal or chronic condition.