As Financial Planners, we hear all the reasons and excuses, from “I don’t need insurance, I’m healthy!” to “I’ll cross that bridge when I get to it.” But what happens when that bridge collapses under the weight of unexpected illness? That’s when reality comes crashing down, often taking financial security with it. The latest Cost of Care report from Zurich Financial Services delivers a sobering update on the financial burden illness can impose on Australians. It’s a clear reminder: health costs aren’t something to gamble with.
The High Cost of Health Surprises
The report reveals that Australians face mounting health challenges, and not just minor ailments. These include life-altering, wallet-draining conditions. For instance, spinal cord injuries alone can cost up to $12.9 million over a lifetime—definitely not pocket change. Even common illnesses like cancer, mental health disorders, and heart disease carry severe financial consequences.
Consider Greg. Greg was fit and healthy until a cancer diagnosis blindsided him. He figured his wealth could carry him through, and it did—for a while. But as the bills piled up, his retirement savings shrank faster than he was comfortable with. The new kitchen he planned for his home? Gone. The dream holiday to Europe? Postponed indefinitely. Fortunately, Greg took advice and secured the right insurance policies. Although he wasn’t thrilled about paying premiums, the alternative—selling his house to pay hospital bills—made them a lot easier to swallow.
Greg’s story highlights a growing concern—cancer. This silent financial killer is just one of many health conditions causing significant financial strain
Cancer: The Silent Wallet Killer
Cancer, unsurprisingly, ranks high among the costliest conditions. Since 2018, eight of the ten most common cancers have surged. Prostate cancer alone has spiked by nearly 44%. The report shows lifetime costs for cancers like head, neck, and thyroid exceeding $100,000.
Sarah learned this the hard way. Diagnosed with breast cancer at 42, she thought Australia’s public health system would cover everything. Spoiler alert: it didn’t.
Sure, Medicare covered the basics, but extras like private treatment, time off work, and myriad out-of-pocket expenses quickly ate away at her savings. Luckily, Sarah had taken out trauma insurance, which covered her mortgage repayments and provided a financial cushion while she focused on recovery. Without it, she would have faced two battles: one against cancer and one against financial ruin.
The Most Expensive Ailments: A Financial Checklist
The report’s most eye-opening stats highlight the financial impact of serious health conditions:
- Spinal Cord Injuries: As mentioned, these can cost up to $12.9 million over a lifetime.
- Childhood Cancer: $1.09 million over a lifetime. Parents should never have to choose between treatment and keeping a roof over their heads.
- Motor Neurone Disease: Around $201,340. While it may seem more affordable, battling a progressive disease means every dollar counts.
And for those thinking, “It won’t happen to me,” remember: life is unpredictable. Take Tim, for example. In his early 50s, fit, and a non-smoker, Tim never thought he’d suffer a stroke. Without income protection insurance, his family would’ve been in serious financial trouble. Thankfully, his policy covered his salary, allowing his wife to focus on his recovery instead of finding a second job.
Mental Health: A Growing Concern
Mental health conditions are on the rise, too. The Cost of Care report found that over 12 million Australians experienced mental health issues between 2020 and 2022. Anxiety, depression, and substance abuse are not only emotionally draining but financially taxing. With out-of-pocket costs and the potential for lost income due to time off work, mental health issues can quietly devastate your savings.
James and Emily, a young couple, faced this challenge firsthand. James was diagnosed with severe anxiety, forcing him to take a leave of absence from work. They thought they were “young and invincible,” so they didn’t bother with income protection insurance. But their savings dried up within months, leaving them scrambling to make ends meet. Had they sought insurance advice earlier, James could have focused on healing without the added financial stress.
The Public Health System Won’t Cover Everything
While Australia’s public health system is world-class, it has limitations. Long waiting times for surgeries, restricted access to specialists, and out-of-pocket expenses can make relying solely on Medicare risky
We’ve seen clients who forgo insurance, relying solely on the public system. Some manage, but many don’t.
Actionable Takeaways
So, how can you protect yourself and your loved ones?
- Review Your Insurance: Income protection, trauma cover, and life insurance aren’t luxuries—they’re necessities.
- Plan for the Unexpected: Assume you’ll get sick at some point. It’s not pessimism; it’s realistic financial planning.
- Talk to a Financial Planner: It’s cheaper than facing a $100,000 medical bill alone.
- Understand Your Limits: Public health systems are great, but they won’t cover everything. Know where the gaps are.
In the end, it’s not about being paranoid—it’s about being prepared. Future health costs can threaten anyone, but with the right financial strategy and personal risk insurance, you can ensure you’re ready for whatever comes next. When that bridge comes, you’ll cross it confidently. Believe me—I’ve seen it all.
Continuum Financial Planners Are Here to Help
At Continuum Financial Planners (ContinuumFP), we have decades of experience dealing with the full range of personal risk insurances. Our team knows the products and strategies available to suit your circumstances. To arrange a meeting to review your:
- Need for life insurance (personal risk insurance), including
- Existing insurance portfolio (inside or outside of superannuation)
Please phone our office on 07-34213456, or at your convenience, use our Book A Meeting facility.
(This article was first published in September 2024.)
