How to plan for an unexpected illness

Stop for a minute. Shut your eyes, slow your breathing, and think. If you had to name something that provides an immediate boost to your confidence, what would it be?

Is it lifting heavy weights? Nailing a work presentation? Doing that one thing you’ve been dreading (and finding it wasn’t so hard after all)?

We’re guessing that preparing for an unexpected accident or illness isn’t on that list — but we’d suggest it should be. Knowing that you and your loved ones are protected if the worst comes to worst is a powerful confidence booster, giving you the assurance and security to move forward in life.

And the benefits go even further, with the Australian Unity Wellbeing Index — a 20-year study into the wellbeing of Australians, developed in partnership with Deakin University — identifying “future security” as one of the seven factors, or domains, that underpin our wellbeing.

But thinking about being seriously ill or incapacitated can be challenging — let alone actually planning for it. We enlisted two of the experts at Australian Unity to talk us through their strategies for preparing for an unexpected health issue, giving you the tools you need to go from cautious to confident.

As the National Manager — Legal Partnerships at Australian Unity, lawyer Angela Ehsani works with people who have received a financial payout as a result of an illness or injury. It means she is a strong advocate for preparing for unexpected ill health.

“It’s always better to plan,” she says. “If you have the benefit of planning, it reduces the shock factor, the ‘What do I do now?’ Planning gives you control, and it gives you choice."

Angela recognises that many of us find it difficult to think about illness or injury, however, and suggests that one way to move forward is to consider the broader repercussions of any ill health.

“Remember that these things don’t just impact on yourself. You’ve also got loved ones who you truly care about who will also be impacted.” She adds: “We all want to protect our family and take care of our loved ones, so why wouldn't we extend this to planning for our health?”

Step one when you're planning for an unexpected illness or injury? Making sure you’ll be able to get the medical care you need.

Health insurance can play an important role, giving you peace of mind that your medical costs may be covered in your time of need. As Swati Kakkar, of the Customer Solutions Team at Australian Unity, notes, “There would be very few things that would be completely unforeseen and wouldn’t potentially be covered under health insurance.” She gives the example of falling down the stairs. “Things like that would potentially be covered under accidents.”

This doesn’t mean you always need to choose the top cover. Rather, Swati says that you should assess your health, financial situation and needs to find the cover that suits you best. “Go to your health fund’s website, review the products and log into your account to see what you're covered for,” she says.

Your health fund’s customer service team can be invaluable here. “Pick up the phone. Let us help you in the best possible way,” says Swati. “If someone calls, we’ll have a detailed discussion with them about their needs. What does their health look like? Do they have any pre-existing conditions? Is there anything they need to be covered for because of family history?” Swati says this all helps to ensure that you get the right cover for your situation.

Once you’ve found the right cover, it’s also important to continue to check that it’s still meeting your requirements. “We should all check in on our health insurance once a year,” says Swati. “Take five minutes to stay on top of things.”

If you're seriously ill or injured, you may need to take time off work while you have treatment or recuperate. It means your finances can take a hit, which can be a source of stress at a time when your focus should be on getting better.

“It’s really important, particularly if you’re the breadwinner,” says Angela of creating a financial safety net. “If you have a family depending on you, you need to make sure you can minimise the impact if something happens to you.”

Angela strongly recommends getting advice that's tailored to your specific situation. “It’s great to use Google and try to understand your options. It’s a starting point. But you’ll get the right advice from an expert, and they will prompt you with questions if you’re not sure what you're doing,” she says.

There are two key strategies that she suggests considering: creating an emergency fund to support you through most illnesses or injuries and looking at income protection for longer-term illnesses or injuries.

“There’s putting money away for a rainy day — also known as an emergency fund,” says Angela. As these savings will need to be able to be accessed quickly, she suggests putting your savings in a high-interest account, rather than something like a property investment, which will require time and effort to release the funds.

Angela also suggests thinking about taking out income protection insurance, which will fund an agreed proportion of your pre-tax income (typically up to 75%) for a certain period of time if you’re unable to work due to illness or injury. “It relieves the pressure, just knowing that you have that in place if an unexpected health event occurred,” she says.

If your illness or injury meant you were unable to make your own decisions, would your loved ones know your wishes? Even with the best of intentions, misunderstandings and miscommunications can occur — which is why Angela recommends getting legal advice to make sure your wishes are met.

In most situations, an enduring power of attorney is a key step in planning for decision-making if you lose capacity. A legal document, the enduring power of attorney allows you to appoint a decision-maker ahead of time, which comes into effect if you can’t make your own decisions.

It’s critical that you carefully consider who you will choose to be your attorney, says Angela. “My advice is to choose someone you trust, who is willing and able to step into your shoes to make financial and legal decisions on your behalf.”

This doesn’t necessarily mean that your partner or your sibling is always the right person, however. “You need to ensure that person understands the role,” says Angela. “There are responsibilities that go with the power of attorney that might impact on their personal circumstances. Particularly with complex financial situations, you really need to look at who is the most suitable and well resourced.”

Angela also emphasises the importance of communication in ensuring your wishes are met. “You need to have a very good discussion about what the power of attorney means, and your specific situation. Being on the same page as your attorney is really important.”

She adds: “Open discussions with family — that can be tricky. No-one wants to talk about it, but the awkwardness is so much better than the alternative.”

It’s a statement that accurately sums up the process of planning for unexpected health issues — it’s uncomfortable but important. And, with your plan in place, you can enjoy the confidence and security that goes along with knowing your future is under control.