Coping with illness is challenging enough, but it pays to prepare financially for potential difficulties.

Mortality fears are swift to strike when cancer is diagnosed, but for some patients crippling money troubles can be hot on their trail.

The double whammy of increased medical and related costs, and long periods off work can push many unprepared Aussies into strife.

Sydney sonographer and mother-of-three Helen Conway, 43, says her family continues to feel the financial after-effects of her year-long battle with breast cancer.

Diagnosed with an invasive lobular carcinoma in late 2011, Conway endured an unsuccessful lumpectomy and several months of chemotherapy followed by a double mastectomy and breast reconstruction during 2012. She is one of about 125,000 Australians to be diagnosed with new cases of cancer each year. That number is predicted to rise to 150,000 by 2020, according to the Cancer Council of NSW.

Having to spend nearly six months off work and find $10,500 in out-of-pocket medical expenses left Conway and her husband, Terry, a sales manager, in dire straits and forced them to dip into superannuation to make ends meet.

A contractor with no sick leave or income-protection insurance, Conway could only work one or two days during the weeks she was not receiving chemotherapy, and not at all for several weeks before and after her operation.

In addition to the family’s usual outgoings, medical expenses, including the surgeon and anaesthetist’s fees, had to be paid in advance.

”For the first three months we were OK – by the fourth month there was nothing left and a long way to go,” Conway says.

The couple’s combined income was too high for them to qualify for Centrelink assistance.

Having redrawn on the mortgage, maxed out credit cards, sought payment holidays on utility bills and rates and negotiated to defer their sons’ school fees, the pair were low on options and reluctant to borrow from relatives.

With the help of a financial adviser, Conway applied for the early release of $9500 in superannuation to pay her medical expenses – a request only approved when the account holder can demonstrate significant hardship.

Specialists were asked to wait for their fees while Conway sweated on the application, which took three months to be processed.

”My mother was going to jump in and offer to pay it if I couldn’t get any money,” Conway says.

Although Conway and her family’s straitened circumstances were distressing, they did not induce quite the panic that might have arisen under different circumstances.

”You think, ‘I have cancer cells in my body – take a number and wait,”’ she says.

Positive attitude notwithstanding, ongoing financial pressure can be crushing for those whose illness has already rendered them weak and vulnerable, Conway says.

”It eats at you even if you’re really resilient and positive,” she says.

”If you can’t afford to pay those bills, you will crack.”

Research suggests the Conways are not alone in their predicament.

A 2007 Access Economics study for the NSW Cancer Council showed households could expect to lose about $47,000, including $9000 in healthcare costs, when a family member was diagnosed with cancer.

Lost wages and mounting costs such as treatment, childcare and accommodation can be ruinous for those whose affairs are already finely balanced, says the council’s director of information and support services, Gill Batt.

Some patients have to resort to bankruptcy after exhausting their resources, while others have funds in mortgages and superannuation that are not easily accessible.

Families with two workers where both incomes are counted on are often hardest hit.

”For people who don’t have a lot of savings, the actual impact of having to leave their job … it can happen quite quickly,” Batt says.

”It’s one of the complications of cancer that you wouldn’t think of.” Cancer councils can offer small amounts of financial assistance and organise free legal and financial advice for those experiencing hardship or needing help to negotiate an extended absence with their employer.

Income-protection and trauma insurance may cushion against financial vicissitudes but are not on the radar for many, according to Anthony Newton, principal adviser at Lighthouse Financial Group.

”I really do think that there is a total lack of education around the likelihood of being off work due to illness and injury,” Newton says.

”Having enough income to pay for one’s current lifestyle is critical to maintain dignity and maximise the chance of getting better and back to work.”

Income protection can replace up to 75 per cent of wages or salary for a defined period if a policyholder is incapacitated, while trauma cover provides a lump sum if a specified illness is diagnosed.

Premiums vary, depending on age, gender and occupation. A professional man of 45 with no health issues should pay about 1.5 per cent of his salary for 75 per cent income protection to age 65, with a 30-day waiting period, Newton says.

A woman of similar age and circumstances would pay about 2.4 per cent for the same cover.

Talking through the options and coming up with a ”disaster management” strategy can be helpful for those who realise belatedly that their contingency planning is inadequate.

It’s best to do it soonest, says Lindon Turnbull, principal at The Hills Forum Financial Planning.

”Without insurance, a cut in lifestyle may be needed,” he says.

”An adviser will look at all options – what are the decisions and time frames? You need to deal with the facts rather than hope it’s OK, which is the tempting course of action for many.”

Melbourne hospitality entrepreneur Paul Baden, 59, says timing and luck rather than prudent planning helped keep his financial position healthy after being diagnosed with non-Hodgkin lymphoma in 2005.

Baden endured several rounds of chemotherapy then spent much of 2006 in hospital following a bone-marrow transplant.

The owner of a hospitality recruitment agency, he was able to leave management of the firm to his long-time business partner while he continued to draw an income.

Being single and self-sufficient meant his health worries were not compounded by fears about how the bills were to be paid, while, as a public patient, medical costs were minimal, Baden says.

”People who have that to deal with as well … the less stress that’s given to you, the quicker you’ll recover.”

Posted by Sylvia Pennington – The Age on 7th April, 2013