Preparing for a health crisis
If a loved one is dealing with a serious illness, your main concern is naturally to ensure that they receive the best care possible.
While money may not be the first thing on your mind, managing finances during a health crisis is actually an important way to support your loved ones and secure them the treatment they need
Follow these important steps to help keep your finances on track in a time of crisis.
Don’t wait until there’s an emergency to discuss the wishes of your loved ones. Inquire now about any health insurance policy they may have purchased. Important questions to consider asking include:
- Is the insurance a high-deductible plan?
- Can your loved one cover their deductible until the policy would pick up remaining medical costs?
- Does the policy limit certain prescriptions and treatments?
Talking to a loved one’s financial advisor may also be a smart way to plan ahead. Ask in advance so your loved one can grant their advisor permission to speak to you in case of emergency.
Review potential income sources
Inquire about disability coverage your family member has either through an employer or individually. You should note:
- Short-term disability policies are good for replacing a portion of an ill person’s salary for the first few weeks of an illness.
- Long-term policies, meanwhile, could replace income for up to several years.
Both short- and long-term policies usually have waiting periods, meaning it could be a few days before benefits start. Make sure your loved one will be financially covered during this time.
In the case of a permanent illness or injury, sign up for Social Security Disability payments.
Get all of the information
If you do need to step in, you’ll want a full account of your loved one’s finances. If possible, ask your loved one to make a list of the following vital information:
- All accounts and regular bills
- Logins and passwords for online accounts
- Any liabilities, such as a mortgage or a car loan
If you need to seek any information yourself, the most recent tax return is a good place to start. It lists interest, dividends and capital gains as well as the institutions that earnings came from.
Make it legal
Caring for a sick family member’s best interests will be easier if you have the proper legal documents, including:
A power of attorney names an agent to act on a person’s behalf to make decisions and take financial action should he or she not be able to.
If loved ones have cognitive impairment, make sure you have a durable power of attorney, which stays in effect even after they become incapacitated.
A healthcare proxy grants someone decision-making powers for healthcare decisions. Since you never know when an accident or illness might strike, it’s always a good idea to have a healthcare proxy executed.
This document lets a person communicate his or her wishes for end-of-life care while still healthy. As a caregiver, you won’t have to guess what type of care your loved ones want when they aren’t able to tell you.
Do it today!
Dealing with a family healthcare crisis is difficult enough. Planning early and considering advice from a professional can make the financial aspect less stressful and more secure, so you can focus on getting loved ones the care they need.