Financial planning if you have a chronic illness

Financial planning if you have a chronic illness

If you are living with a chronic illness, needless to say, your financial planning is extremely crucial and it also has to be a little unique and different from others. Not only do you have to manage the day-to-day medical expenses of your illness but also take into account the long term implications of the same, and all this along with your usual income and expenditure flow. It is not easy, but it is not extremely difficult if you have the right plan in place. Most importantly, you must realize that the main burden of any chronic illness, sometimes perhaps more than the illness itself, is the financial implication bit of it. So if you manage it well financially, at least half your illness burden is gone. Let’s see how…

Create a Budget

Making a budget is useful for anyone but in cases of individuals suffering of chronic illness, it is a necessity that has to be done. Since your medical expenses might slowly rise over time and income and expenses might undergo a sea change if you stop being able to work, creating a budget gives you a better picture of it all, provides the base or the foundation on which you can plan your future.

Maintain good financial records

Chronic illnesses come with a lot of paper work and documentation including medical expenses, insurance claims, etc. Tracking these and keeping a good financial record makes life simpler and easier.

Simplify your finances

If you have an illness, the last thing you would want to bother yourself with would be tracking multiple accounts, loans, bills, etc. Try and simplify your finances by consolidating everything. Instead of having numerous bank accounts, have one or max two. Try and consolidate your loans. Automating bill payments, etc not only helps you keep your budget on track, but also gives you more mental space and free time to spend on yourself.


Insurance is a crucial financial element in cases of chronic illness.  Make sure you go through your health insurance policy, every bit of it, the payment terms and conditions, the deductibles, what is covered and not covered and under what circumstances, etc. Reviewing your insurance and maintaining records well in case of claims, etc is high priority for you. WE can assume at this point that you will not get additional life insurance, however, this varies from case to case basis depending on the type of chronic illness you have. Review your beneficiary details and just be up to date with all details of your health insurance

Property planning

Realistically speaking, if one has a chronic illness, it is probably time for him/her to plan things keeping in mind the disability or death factors. As hard as it may sound, it is yet the most practical thing to do. One needs to get all property and money affairs in order legally in the event of your death. Think about the power of attorney aspect and who you would want to act on your behalf in case you your illness make you unable to handle financial matters in the future.

Think about whether you want a living trust as a separate entity created to own your property such as home, investments, etc. You would control your property in the trust, transfer it in an out if you want, change the trust terms, have a loved one as a co-trustee who can function in case you cannot and the like.

Review your property decisions and money matters with your lawyer, create a will so that your assets go to the beneficiaries you want them to in the event of your death.

Review your Financial Plan

Review your Financial Plan regularly and make changes as and when required. Having a chronic illness is not the end of the world. There are many people who have it. However, your quality of life after you get diagnosed and till your last day should be as best as possible, and for that to happen, a good financial plan is a must!