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The diagnosis of a critical illness shakes the very foundations of life. But in addition to accepting what it means for health, there are serious financial implications for those who can no longer work.
King Charles, who is stepping down from official duties due to cancer treatment, does not have to worry about loss of income and, at 75, would also be entitled to the state pension.
But for the approximately 384,000 people diagnosed with cancer each year, a drop in income can be a big challenge.
Many of us don’t consider how we would cope until a diagnosis forces the question to be asked.
Money Mail investigates what support you can rely on from your employer, the state and the insurance policies you can take out to help you in these times when you need it most…
Financial threat: For the approximately 384,000 people diagnosed with cancer each year, a significant drop in income can be a major challenge
What can you expect from your employer?
Employers’ sick pay policies can usually be found in the contract you signed when you joined the company.
These policies (contractual sick pay) could pay you full salary or a percentage over days or months, depending on the generosity of the plan.
However, even if your employer doesn’t offer you anything, you may still be entitled to statutory sick pay (SSP).
This pays £109.40 per week for up to 28 weeks and can be claimed from the fourth day of sick leave. You receive SSP and contractual sick pay at the same time.
If you earn at least £123 a week on average and your employer deducts tax and national insurance from your pay, you should be entitled to SSP, even if you work part-time or have a zero-hours contract.
Check with Citizens Advice at citizensadvice.org.uk or gov.uk/statutory-sick-pay to see if you are eligible.
Some employers also offer insurance policies to workers as a benefit. Check if your employer offers anything; People often don’t realize that support exists.
…and if you are self-employed
A change of life: the King steps away from his official duties
If you are self-employed or there is another reason why you are not eligible for SSP, you may be able to claim Employment and Support Allowance.
You will need to have made sufficient National Insurance contributions and the amount you receive will depend on factors such as your age and whether you can return to work.
For more information, see gov.uk/employment-support-allowance.
Will the State offer any help?
Where you are no longer eligible for the above, other support includes Universal Credit, Disabled Living Allowance and Personal Independence Payment (PIP).
What you can get depends on whether your illness is terminal or whether you will be able to return to work.
There is a good overview of the support available if you are disabled or have a health problem at gov.uk/browse/benefits/disability. Citizens Advice can also help you navigate the system.
Protect income if you can’t work
Critical illness and income protection are the two main insurance policies that pay out if you are unable to work due to illness.
Critical Illness pays a fixed lump sum if you are diagnosed with a serious condition, regardless of whether you can still work or not.
Individual policies will state which conditions are covered, but it is usually around 50 or 60.
About 80 percent of claims under these policies tend to be for heart attacks, strokes and different types of cancer.
Income protection does not have a list of serious conditions. Instead, it pays a monthly sum if you stop working due to illness.
Cover: Critical illness and income protection are the two main insurance policies that pay out if you are unable to work due to illness.
These policies tend to pay for a set time, for the duration of your illness or from the date you apply until state pension age.
Kevin Carr, CEO of insurance platform Protection Review, recommends that when choosing an income protection policy, pay attention to two key words: “own occupation.”
“Look for policies that pay if you can’t do your own work,” he says. “Others may not pay if you are deemed capable of performing paid work in some capacity.”
Many more people have life insurance policies (which pay out when they die) than income or critical illness cover, according to research by life, pensions and investment company Royal London.
While around two-thirds of homeowners have life insurance to protect the family home in the event of premature death, only one-fifth have income protection.
But it says that statistically, men and women are six and 12 times more likely, respectively, to become ill and unable to work than to die unexpectedly.
Critical illnesses tend to cost around six times more than life insurance, but can be a lifesaver for those forced to claim it.
Policies tend to pay out in around nine out of ten cases, according to figures from the Association of British Insurers (ABI).
Around £7 billion was paid out for life, income protection and critical illness insurance policies last year.
The most common reasons claims are denied include if an illness is not considered serious enough or, in the case of a critical illness, is not on the list of covered conditions.
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