Updated: Mar 21
Being diagnosed with a terminal illness is news no one can prepare for. When it happens, you’re thrown into a whirlwind of emotions — and that’s on top of the practical concerns. If this is a situation that you or a loved one is facing, financial concerns are probably the last thing you want to think about. However, thinking about these arrangements now is not only smart from a financial standpoint. Knowing your options, and knowing you’re well cared for, is also a powerful way to reduce the stress and worry felt by everyone involved.
Practical and Emotional Issues
Getting your finances in order is essential, but let’s be honest: the practical and emotional impact of what you’re going through comes first. As the website Legacy.com explains, your primary concern is to explore all the medical issues at hand, including considering who will act as a caregiver and exploring options for hospice and palliative care. Then there are the emotional issues you face. Getting emotional support is just as essential as any plans you make for medical and palliative care.
Your Budget and Income
When you’re ready to address the financial issues, the Journal of Accountancy recommends planning first for short-term financial needs by setting a “care budget.” This budget should include care-related expenses, non-care-related expenses, and all sources of income. Setting this budget will help you identify costs that are covered by health insurance, as well as those that aren’t, so you can get a better idea of what your immediate financial picture looks like.
As part of the budgeting process, make sure you explore all sources of income. You or your loved one may have access to disability coverage if your employer has a group policy, and you may also be eligible to receive Social Security benefits. If you have a life insurance policy, see if you qualify for living benefits, which could include terminal illness or long-term care coverage.
Along with these conventional sources of income, you should also look into how your assets could help. For example, if your partner is terminally ill, you may be able to refinance your home to help pay for their care. For many people, refinancing is a good solution, but make sure you do your homework first.
End-of-Life Plans and Paperwork
If you’ve explored medical and palliative care options, you may have already thought about end-of-life plans. Of course, once you’ve made decisions regarding end of life care, you’ll need to put these wishes in writing by completing advance directive documents. Some people who are terminally ill also choose to make funeral preparations. Making final arrangements allows you to be sure your wishes are carried out; plus, you can have a conversation with loved ones about their role. On the practical side, preplanning also gives you an opportunity to consider funeral costs, which helps ease your loved ones’ burden.
While you’re focused on legal documents, you’ll also want to consider estate planning. If you don’t already have a will, make sure you work with an estate attorney who has experience handling the specific issues that are involved with a terminal diagnosis. The important thing to keep in mind is that any assets you leave will be impacted by how you access them to pay for care, which is why you want to work with an expert who is familiar with this situation. The same holds true if you revisit your will and decide to make any changes.
Dealing with the emotional impact of a terminal diagnosis is hard enough. Then you have to think about these financial issues too. We know how overwhelming that can be, which is why we hope this guide helps you put it all into perspective. Most importantly, don’t try to go it alone. From the practical support of your medical and financial professionals to the emotional support of friends and family, never be afraid to lean on others for help.
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