How Cancer Could Impact Your Business and Financial Future
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As a business owner, you’re used to making tough decisions every day, but nothing can prepare you for the personal and professional challenges a cancer diagnosis brings. Aside from the emotional toll, you’re left navigating how to manage your business, secure your financial future, and maintain stability during treatment and recovery.
Whether you own a small business, are self-employed, or run a larger enterprise, you may need to face difficult choices regarding the future of your company and your financial well-being.
How Does Cancer Impact Business Owners?
For business owners, a cancer diagnosis brings a unique set of challenges, both personal and professional. The physical, emotional, and financial strains of cancer can disrupt business operations, impact personal income, and even threaten the viability of the business.
Health and Ability to Work
Cancer treatments such as chemotherapy, radiation, and surgery often result in prolonged absences from work. For a business owner, this can have devastating effects on the day-to-day running of their company.
A report from the Economic and Social Research Institute (ESRI), funded by the Irish Cancer Society, found that 46% of those who returned to work after cancer treatment reported health issues that negatively impacted their ability to work. This is particularly challenging for self-employed individuals who rely solely on their own efforts to maintain business operations.
Income Loss
According to a report by the Irish Cancer Society, cancer patients face an average income loss of €1,527 per month, which totals a staggering €18,323 per year. Additionally, the average extra cost associated with a cancer diagnosis is €756 per month, with some cases exceeding €1,000 per month.
In the UK, statistics show that individuals with serious illnesses like cancer are at high risk of losing income during treatment. As mentioned in the report of Macmillan Cancer Support, 83% of cancer patients in the UK experience a loss of income because they are unable to work during their illness.
For business owners, the loss can be even more severe as there may be no one to take over their role, and business profits can plummet during periods of absence.
Loss of Employees or Clients
With the owner’s reduced capacity to manage the business, employees might feel uncertain about the future of the company.
This uncertainty can lead to employee turnover or difficulty retaining key staff. Similarly, clients may seek alternative providers if service levels drop during the owner’s absence.
Succession Planning and Uncertainty
For business owners without a clear succession plan in place, a cancer diagnosis could create uncertainty about the future of the business.
If they are unable to continue working, deciding whether to pass the business on to a family member, sell it, or close it down becomes a pressing issue.
Business Closure and Financial Strain
In Ireland, 92% of SMEs are micro-enterprises, meaning they employ fewer than 10 people, and many are run solely by the owner. This makes these businesses particularly vulnerable if the owner cannot work due to an illness like cancer.
Without adequate support or planning—such as hiring temporary staff or using automation—the business can face operational difficulties and revenue loss, ultimately leading to financial strain and even the risk of business closure.
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How Can I Protect My Finances in Case of a Future Cancer Diagnosis?
A cancer diagnosis can be a heavy burden emotionally, physically, and financially. Many overlook the financial impact until faced with medical bills, treatment costs, and lost income. That’s why having financial protection, like serious illness cover, income protection, and even life insurance, is so important.
Key Person Insurance
Key Person Insurance helps protect your business if a crucial team member—like a co-owner, director, or someone whose skills are vital to operations—becomes seriously ill or passes away.
This insurance provides financial support to help cover the costs of lost revenue, hiring, or training a replacement, ensuring the stability of your business during challenging times.
You can also explore options like Co-Director Insurance, Corporate Co-Director Insurance, or Partnership Insurance, which we cover in detail in our article “Can Your Business Afford to Lose a Key Person?“
Life Insurance
A life insurance policy is essential, especially when faced with life’s uncertainties. According to Aviva’s 2023 report, cancer is one of the top three reasons for claims, highlighting just how important this cover can be.
Life insurance not only provides financial support to your loved ones in the event of your passing, but it can also offer peace of mind during a difficult time.
Life Insurance vs. Key Person Insurance
Life insurance and Key Person Insurance serve different purposes, and choosing between them depends on your unique personal and professional situation.
We recently advised a sole business owner of a Limited company to evaluate insurance options. While key person insurance was initially considered, it posed challenges: the payout would go to the company, and accessing these funds would require liquidation—a time-consuming and complex process.
In contrast, a life insurance policy would provide direct payment to their family, ensuring immediate access to funds without dealing with business assets. Given the need for simplicity and quick access to financial support, life insurance was the more suitable option, specifically with dual life coverage and Serious Illness cover for added protection.
However, which insurance is best always depends on individual circumstances.
Serious Illness Cover
Serious illness cover is an essential protection for business owners, providing financial support if you’re diagnosed with a critical illness like cancer. The lump sum payout can be used for medical costs, everyday living expenses, or to replace lost income while you recover, giving you the space to focus on your health without worrying about finances.
Serious illness cover can be taken as a standalone policy or added to other insurance products like life insurance. It is independent when taken as a standalone policy, ensuring any payout won’t affect your life insurance coverage. This flexibility allows business owners to choose whether to keep their life and serious illness protections separate or to combine them for simplicity.
Adding serious illness cover to a life insurance policy provides a combined approach, ensuring financial support is available in case of critical illness while also offering broader coverage for your family or business.
Pension Term Assurance
Pension Term Assurance is a life insurance policy designed to provide a lump sum payout in the event of the policyholder’s death during the term.
This unique policy structure leverages available tax relief under pension legislation, and you don’t need an existing pension plan to take advantage of it.
Eligibility includes being self-employed or working in non-pensionable employment.
One of the main features of Pension Term Assurance is the ability to claim full tax relief at your marginal tax rate on premiums, potentially making this valuable protection up to 40% more cost-effective than a standard Term Assurance policy.
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Cancer Cover
If you’ve previously been denied Serious Illness Protection owing to particular health concerns, cancer cover might be the best option for you.
Cancer Cover is offered by Zurich and is different from traditional serious illness plans because it focuses solely on cancer; therefore, it costs less than serious illness protection.
Cancer-only insurance policies normally pay out a lump sum of money if the policyholder is diagnosed with cancer as defined in the policy, which can be used to pay for medical expenses, make lifestyle adjustments, or cover other costs associated with the illness.
Most of the severe forms of cancer would ordinarily be covered, such as:
- Breast Cancer
- Lung Cancer
- Bowel Cancer
- Gynae Cancer
- Stomach Cancer
With Cancer Cover, Zurich also provides partial payments for less severe, more treatable types of cancer. These ordinarily include:
- Testicular Cancer
- Early Stage Bladder Cancer
- Low-Level Prostate Cancer
- Cancers in situ
Income Protection Insurance
Having Income protection is crucial in case you’re diagnosed with cancer and unable to work.
According to Aviva’s 2023 report, 20% of claims paid out were due to cancer, highlighting how common this situation can be.
Income protection ensures you still receive a portion of your income if illness prevents you from working, allowing you to focus on your recovery without the added stress of financial instability.
Here are some of the benefits you can avail when taking out an Income Protection policy:
- Up to 75% of your annual salary
- Covered until the day you retire
- Eligible for income tax relief
- Increase your cover without underwriting
- Can be index-linked (keep up with inflation)
- Deferred periods of 4, 8, 13, 26 & 52 weeks
Health Insurance
For those who want to access private healthcare for cancer treatment, health insurance can be a great asset. Private hospitals often provide shorter waiting times for consultations, tests, and treatments.
In addition, health insurance may cover the cost of specialist consultations, treatments like chemotherapy and radiotherapy, and post-surgery care.
Get a Business Protection Quote
Get a Business Protection Quote
Whether it’s safeguarding against the financial impact of you or a key person falling ill or passing away, or ensuring your business can continue operating smoothly in the face of serious illness or loss, having the right protection in place is crucial.
By getting a Business Protection quote, you can assess coverage options such as Key Person Insurance, Co-Director Insurance, Life Insurance, or Serious Illness, ensuring that your business remains secure no matter what challenges arise.
We are also experts in savings and investments, pension tracing, personal and business financial planning, mortgages, and wealth management and extraction and more.
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All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
