Money can be a painful distraction when illness hits a family.
We all like to think bad things won’t happen to us, but the reality is that lives are disrupted every day by serious illness. According to the Australian Institute of Health and Welfare, on an average day in Australia, 380 people are diagnosed with cancer, 170 people have a heart attack, 100 people have a stroke and 14 people are newly diagnosed with end-stage kidney disease.
Ellie Smith’s partner, Adam Parker*, became one of these statistics a few years ago, when kidney failure meant he had to endure nine months of gruelling dialysis sessions in preparation for a kidney transplant.
Together since 2007, the couple moved from New Zealand to Victoria’s Mornington Peninsula region in 2010, following a work transfer, and bought their first home together in early 2015.
While Adam was sick at birth, medical staff couldn’t figure out what was wrong with him. It wasn’t until he was two years old that a specialist diagnosed him with the incurable respiratory disease, cystic fibrosis. He underwent a lung transplant in 2006, at the age of 24, but according to Smith, appeared healthy when they met.
"He did a lot, he went snowboarding all the time and lived life quite full compared with a lot of people," she says.
"I guess he tried to make the most of it. To me there didn’t really appear to be any health issues. I knew he had cystic fibrosis but he didn’t seem like a sick person. I didn’t know how bad it was, really."
The downward slope
Required to take high doses of steroids following his lung transplant, Adam developed diabetes; a complication which appeared to be controlled successfully with insulin, until his condition took a sharp turn for the worse in late 2015.
"One day after work I noticed that his legs were really swollen – if you pressed on them the flesh would just sink in and not come back out," Ellie says.
"He wasn’t feeling like doing anything, just really sick in general, so we started going to the doctor for tests and they told us he was suffering from oedema which is when fluid builds up in parts of your body.
"It was our first Christmas in the new house and Adam’s mum came over from New Zealand. On Christmas Day he didn’t do anything. He sat on the couch, miserable, and with his body so swollen he couldn’t even fit into his own shoes and clothes."
After an emergency trip to the hospital on Boxing Day, Parker was diagnosed with kidney failure and given emergency dialysis treatment.
He was subsequently placed on the transplant waiting list and advised he could face a five-year wait for a deceased organ donation, unless a compatible family member willing to donate could be found.
Undergoing 10 hours of dialysis every evening while he waited for his health to improve to be able to undergo a transplant made it impossible for Adam to continue working.
Facing financial stress
Aside from health, the secondary fear for many couples in this situation is the financial stress resulting from an out-of-work partner’s loss of income. According to the most recent Household Expenditure Survey by the Australian Bureau of Statistics, households reporting financial stress are steadily increasing, with 15% (or 1.3 million) of Australian households indicating financial stress.
But for Elli, there was security. Income protection insurance meant Adam’s ill health and the couple’s anxiety about his prognosis was not compounded by this stress.
"When we came to Australia, Adam’s work set up a policy for him,” Ellie says.
"We were so fortunate he was eligible, despite his medical history. After he stopped working he had to wait three months and then he was able to receive 75 per cent of his salary.”
"We felt so surprised and lucky. We don’t have children but we had our mortgage and all the normal liabilities and expenses people have. I managed to keep working for most of the year but it would have been a nightmare for us financially if Adam hadn’t had that cover."
In October 2016, Adam’s mother travelled to Australia to donate a kidney for her son; the twin operations were an all-day affair at The Alfred hospital in Melbourne.
"Adam and his mum both went in at 10.30am and I didn’t hear anything until 10pm that night," Ellie says. "The whole day I was so anxious – panicking. I hadn’t heard anything from the doctors and you just don’t know if no news is good news or bad news."
Getting back on his feet
In Adam’s case it was good news. By March 2017 he had eased back into part-time work and commenced studying towards a diploma in architectural drafting.
"He was definitely very tired but he will keep pushing through,” Smith says. “He has a lot of motivation – he’s like, 'I’m not going to give up'."
Tips for reducing financial stress
According to the 2018 ANZ Financial Wellbeing Report, almost 28% of Australian respondents have less than $1,000 in savings. The finding showed that having less than $1,000 in savings was strongly associated with low levels of financial wellbeing.
A good place to start reducing financial stress is to set a budget and track your spending, with the goal of reducing your expenses. You could also consider protecting your income with insurance.
What is income protection insurance?
Income protection covers up to 75% of your regular income if you’re unable to work due to an illness or serious injury (beyond your specified waiting period). Monthly limits may apply.
Your occupation is a key factor in eligibility, and the amount of cover you may be eligible for. Certain occupations or types of work aren’t eligible, so you should refer to the criteria in the Product Disclosure Statement to understand if you would be covered.
There are multiple income protection insurance benefits, including peace of mind. If you have income protection insurance, you can reduce financial stress and focus on getting better rather than worrying about how you’re going to cover bills such as the mortgage, school fees, groceries, healthcare or other outgoings.
Some policies, like ANZ Income Protection, also offer additional cover if you’re out of work due to involuntary unemployment or you need to take time off to look after your seriously ill child.
Always check the product disclosure statement (PDS) to understand what you’re covered for, the relevant income protection waiting periods and how to make an income protection claim. Our income protection FAQs provide more details on what typically is and isn’t covered.
How much does income protection insurance cost?
Like other insurance policies, the amount you pay for income protection cover is largely informed by how likely you are to make a claim, how long you’re willing to wait before receiving a benefit and how much money the insurer might then have to pay.
You could reduce income protection costs by lengthening the waiting period (the amount of time you wait before you’re eligible to make a claim) and reducing the benefit period (the maximum length of time you can receive payments).
An income protection insurance tax deduction could also help offset the cost of your policy. Generally, costs you incur directly related to your ability to produce income may be tax deductible. This could include some of the premiums you pay for income protection insurance, depending on the type of benefits covered under the policy. Taxation law is complex, and we recommend you seek tax advice that is specific to your personal circumstances from a tax adviser or registered tax agent to discuss whether a deduction would be appropriate for you.
Read ‘Is income protection worth it?’ to help you decide if income protection insurance is right for you.
*Based on a personal story told by an ANZ staff member. Names have been changed to protect identity.