After illness strikes, the financial blow follows

Many tens of thousands of women are diagnosed each year as having cancer, 21,000 in England and Wales involving breast tumours. The good news is that increasing numbers of women survive the disease. But, as Iain Morse writes, the financial problems caused by cancer can linger on for just as long as the illness itself.

It's the moment every woman dreads, when that casual breast examination in the bathroom reveals a small lump, or when a hospital consultant calls you at home and asks to see you immediately after a routine cervical scan.

For Joan Henson, a medical receptionist, the diagnosis came at a particularly poignant moment: "I was told I had breast cancer on Christmas Eve one year ago. It's a horrible experience. I sat in church on Christmas Day, surrounded by happy people and just felt so isolated. Cancer is very frightening; it feels like a death sentence."

A million miles away from Joan Henson's personal anguish, insurance underwriters and actuaries also weigh up the odds of life and death after diagnosis. Their statistics show breast cancer in particular accounts for 10.6 per cent of all female cancers and 9.5 per cent of cancer deaths overall, while cervical cancer accounts for 2.6 per cent of tumours. What is more, the reported incidence of cancer in women under 35 is also increasing.

This is not all grim news: a spokeswoman for the Imperial Cancer Research Fund points out that a large reason for the increase in cancers being diagnosed is actually because of the success of screening programmes throughout the UK: "The incidence of cancer may be rising, but deaths from cancer are decreasing," she says.

The statistics suggest she is right: 62 per cent of women with breast cancer survive five years or more, of which 84 per cent of those diagnosed early survive for longer compared with 18 per cent of those where it is only picked up at an advanced stage. Some 58 per cent of women with cervical cancer and 70 per cent of those with ovarian cancer live more than five years after diagnosis. With ovarian cancer, the survival rate is 28 per cent. However, where it is detected early, 90 per cent are alive after five years.

But for many women, survival is not enough. Paul Cooper, a principal underwriter at insurers Swiss Re, says: "Many more people survive serious illness than previously, while some can be cured completely. But the consequences of these illnesses are lifestyle-threatening. They can include loss of earnings [or even] early retirement."

Joan Henson, 52, is "lucky" in that regard: "I'm not well off, but something had made me keep my private medical insurance. This paid for immediate treatment at the Royal Marsden; I went in the day after that New Year. One of the worst aspects of cancer is having to wait for treatment. You feel the disease could spread at any time. But I didn't have to wait. Norwich Union covers my medical bill and the total must be well over pounds 20,000."

Fear of financial loss after cancer strikes has meant that in addition to traditional life insurance, where cash is paid to dependents on death, there has also been a huge increase in sales of policies which pay out lump sums on diagnosis of a range of tumours, plus a range of other critical illnesses including strokes, heart attacks and similar.

The costs of such policies depends on a variety of factors, Mr Cooper says: "Normal factors like age, and occupation, but primarily with regard to family history and smoker status.

"Family history is a strong indicator; if your mother suffered breast cancer in her 30s and 40s, the cost of the policy will probably go up to reflect this. Sadly, some women with this family history seem to avoid screening for early detection, despite needing it more than lower-risk groups."

In recent years, a handful of insurers have entered the "women's market", including one company, AIG, which offers a Well Woman policy covering against seven female-only cancers. For premiums of pounds 5.85 a month a 30- year-old woman would receive pounds 6,000 on diagnosis, pounds 3,000 for surgery, pounds 500 a month for two years, plus pounds 100 a day for the first 100 days in hospital.

However, Fiona Price, a London independent financial adviser specialising in advising women, warns: "Insurers wrap products up with a pink bow and try to sell them on fear. The message is that these products often do not give good value as other ones marketed to both men and women, which cover a far wider range of illnesses at little or no extra cost."

Melanie Reid, aged 30, bears out Ms Price's comments. While her insurance policy made a huge difference, her cancer could just as easily have been contracted by a man. She says: "My husband started a policy a few years ago to cover him at work. Lois our daughter, fell ill with E-coli, a severe stomach infection, which damaged her kidneys and meant she needed dialysis. The policy covered her and paid out pounds 15,000.

"Then, in February last year, we found out that I had thyroid cancer. We were under a terrible weight and worried about what would happen if I couldn't take care of Lois. Both of us had been off work and were struggling to keep up the mortgage. But then, on top of the first payment, we received pounds 55,000 against my condition.

"This money has been a real source of comfort. We've used some to help modify the house for Lois and can afford treats we couldn't afford before."

Cover against multiple illnesses is often better value, as two contracts by market leaders Skandia and Allied Dunbar demonstrate. Skandia's Lifetime Plan, offers cover of pounds 100,000 at a monthly premium of only pounds 18.22 to a non-smoking woman aged 30 over a 30-year term.

Allied Dunbar's Protection Plan offers the same level of cover pounds 100,000 but at a higher cost of pounds 44.95 per month. However, this is a whole of life policy (that is, indefinite) rather than for a specific term, includes waiver of contribution, and allows both premium and benefit to rise in line with inflation. It also includes life insurance to the same value.

Most insurers charge women at least marginally less than men of the same age, for the same level of cover. But there are signs that some big players in the market are moving toward equalisation of premiums. According to Mr Cooper, this reflects the fact that as "women move into the workplace, they are taking not just the same jobs as men, but the same stress-related rates of illness".

Whether financially affected or not, for those who are diagnosed as suffering cancer, life will never be the same, as Joan Henson affirms: "This experience has changed me. I spend far more time with my family, particularly my grandchildren. I am more positive and my appreciation of life has certainly intensified. Unimportant things fall aside."

Donations to the Imperial Cancer Research Fund: PO Box 123, Lincoln's Inn Fields, London, WC2A 3PX. Or call 0171-269 3662 for credit card donations.