Cancer: How to put yourself in control.

With some concerning headlines in the media recently about the NHS, how should you prepare for a serious illness if you were unfortunately diagnosed? What impact would a serious illness have on your finances or retirement? The Health Foundation has warned that the NHS waiting list could reach 8 million by August 2024 next summer regardless of whether strike action continues [a]. Recently two large UK insurance companies [b] have released their claims reports which provide a snapshot of the claims concerning health, life insurance and critical illness within the UK. Not surprisingly, one health condition still dominates, cancer. While this in itself is disappointing it is not, unfortunately, surprising. What the claims data does demonstrate, which some people may find concerning is that cancer does not discriminate on age. Recent statistics show that[c]:

• 1 in 3 claims for breast cancer are for women under the age of 50.
• 1 in 4 cancer claims are made by those under under 50.
• 2/3^rd of cervical cancer claims are for those under the age of 50.
• Skin cancer is the biggest cause of cancer for men under the age of 50.
• 4% of all income protection claims are cancer-related with an average claimant age of 42.

Taking into account the entire universe of claims, cancer is among one of the largest categories as a reason for a insurance claim. The data states that:[d]

• 6% of critical illnesses (including total permanent disability) are cancer-related.
• 2% of children’s claims are cancer-related.
• 2% of life insurance claims are cancer-related.

An internet search of UK cancer waiting times yielded a large litany of concerns about access to cancer diagnosis and treatment. This quote reflects the current state of affairs:

“All cancer waiting time targets have once again been missed in England despite the best efforts of NHS staff. Behind these figures are people waiting anxiously for a cancer diagnosis, and patients left uncertain about when they’ll get the treatment they urgently need. Although strike action has disrupted services, the waiting lists that we see in England today are not new. One key target has been consistently missed since 2015. This is a stark legacy of decades of underfunding by the UK Government. As we head into winter, the challenges facing the NHS are enormous. The UK Government must invest more money in NHS staff and equipment to end these unacceptable waiting lists. A long-term strategy to prevent, detect and treat cancer sooner is needed to help improve people's chances of survival." - Michelle Mitchell, Cancer Research UK's chief executive [e]

The latest results in cancer treatment statistics for England in August 2023:[f]

Urgent suspected cancer referrals standard: Target Missed

• 74.8% of people were seen by a specialist within 2 weeks of an urgent suspected cancer referral in August 2023. The target is 93% and was last met in May 2020.

The Faster Diagnosis Standard: Target Missed

• 71.6% of people were diagnosed or had cancer ruled out, within 28 days of an urgent referral in August 2023. The target is 75% and has never been met since its introduction in October 2021.

The 62-day standard: Target Missed

• Only 62.8% of people in England received their diagnosis and started their first treatment within 2 months (or 62 days) of an urgent referral in August 2023. This is well below the target of 85%, which has not been met since 2015, with a record low in January 2023.

The 31-day standard: Target Missed

• 91% of people started treatment within 31 days of doctors deciding on a treatment plan in August 2023. The target is 96%. 

While we are lucky in the UK to have the NHS to deliver cancer treatment the data has shown that the NHS's capabilities to deliver quick treatment and prevention is lacking.

If you suspect you have cancer getting a quick diagnosis is critical

If you are unfortunately diagnosed with cancer getting referred quickly is key. One recent medical study estimated that a 4-week delay to cancer surgery led to a 6-8% increased risk of dying. [g] Vitality, in its latest claims report, confirmed that private GP consultations rose to 114,000 (up 245%) from 2019-2022. Technology is having an impact on providing quick diagnosis. For example, people with suspicious moles of lesions can get assessed online using skin analytics where people can submit photos using a dermascope camera (sent via post). 60% of members using digital skin diagnostics are given the all-clear. Patients using this service are referred in an average of 4 days.

If you get diagnosed with cancer what support do you have in place?

Given that a large proportion of people contract cancer under 50, you must make sure you have adequate insurance coverage in place. If you don’t have significant assets and are reliant on income, insurance is critical. For those who have accumulated assets for retirement but are not near retirement age, accessing retirement assets to pay for medical treatment may not be possible. Even if you were able to access those assets to pay for treatment, spending these assets could adversely affect your retirement, could have an impact on your living standards and negatively impact your dependents.

What can I do?

With NHS waiting times reaching unprecedented levels ensuring you have proper insurance coverage is key. Many people receive private medical insurance through their employer which can provide adequate coverage but can offer a false sense of security as most employees have not reviewed their benefits. Some questions you should ask yourself and discuss with your financial adviser:

1. What coverage am I receiving (private medical insurance, life insurance, critical illness insurance) if I am diagnosed with a life-changing illness like cancer?
2. Am I adequately covered by insurance (private medical, critical illness, income protection and life insurance)?
3. If I leave my employer what are the plan departure provisions for continuing coverage privately if I have cancer?
4. If my employer changes its private medical coverage is there a circumstance where I could not get covered if I have had a significant claim?
5. If I was diagnosed with cancer and survived, what impact would this illness have on my financial security and my retirement strategy?
6. If I have a break in coverage, and I am diagnosed with cancer, what is the likelihood I could get re-insured?
7. If I am receiving insurance through my employer what is the total cost of the insurance that I am paying factoring in any additional tax costs compared to if I had a plan in my name? Certain types of insurance will incur a tax charge (benefit in kind) if provided by your employer which is not often considered. While having an employer-provided plan may be cheaper having a policy in your name should be weighed up with what coverage you desire. Having insurance in your name offers the advantage that you are in control and your coverage is not tied to your employment. This is particularly important if you are considering leaving your employer. If you have a private policy some insurers give transparency about what premium increases could be and offer a maximum cap on potential increases if you have had a significant claim. While your premium will be higher, you will likely still be eligible for insurance coverage if you have not had a break in coverage.
8. If I am not able to work what income protection and critical illness insurance do I have while I am getting treatment? People with significant retirement assets and access to those assets often self-insure, meaning, that they pay for the cost of private treatment themselves. Depending on the circumstances being self-insured can be a valid strategy, however, in adverse circumstances could affect any legacy to your dependents.
9. If my cancer is terminal, what life insurance coverage do I have for my dependents?

Having insurance will not prevent you from contracting cancer but making sure you are informed and asking yourself ‘what-if’ can make you better prepared. Modern cash flow planning tools now offer the ability for your wealth advisor to determine if you have adequate insurance coverage in the event of an illness. Recent claims data indicated that the average pay-out for a critical illness claim was £71,246 (of which 58% of critical illness claims are cancer-related).

Mark Twain stated, “Knowledge becomes wisdom only after being put to good use”. Having sufficient insurance coverage to enable you to get access to medical treatment quickly could increase the chances of helping you beat cancer, protect you and your family from financial shock and help prevent your retirement strategy from blowing off course. This article could be the basis of a conversation with your financial advisor to help prepare you in the unfortunate event you are diagnosed with a serious disease such as cancer. Please contact me if you would like to discuss this further.

Please note health insurance policies have no cash in value at any time.

Peer reviewed by: David Medland, Chartered Financial Planner, APFS

[a] NHS waiting list 'could reach 8 million by next summer' even if there are no further strikes (msn.com)

[b] Individual protection claims report 2023 (aviva.io), health-claims-insights-report-23.pdf (vitality.co.uk)

[c] Individual protection claims report 2023 (aviva.io), health-claims-insights-report-23.pdf (vitality.co.uk)

[d] https://news.cancerresearchuk.org/2023/10/12/cancer-waiting-times-latest-updates-and-analysis/

[e] https://crukcancerintelligence.shinyapps.io/CancerServicesWaitingTimes/

[f] https://www.bmj.com/content/371/bmj.m4087