It happens to the best of us. No matter how well you map out your budget and savings, money emergencies can happen and throw a wrench in your daily lifestyle and, worse, derail your future.
We all know that we’ll eventually be faced with an emergency; we just don’t know when. This fact could be one of the reasons why you got life or critical illness insurance to begin with.
But what exactly is considered a money or financial emergency? In a nutshell, it’s an unavoidable reality that can directly or indirectly affect your income-earning ability for an extended period.
It’s also important to note what is NOT considered a money emergency: buying a luxury item, planning a wedding, going on vacation, or remodeling your home. These expenses you can save up and plan for without impacting your ability to earn money.
So, now that’s out of the way, what are money emergencies you should be preparing for?
1. Job loss and business closure
Losing one’s job or source of income can be stressful in many ways. No matter where you are in your career, it can make you feel adrift and directionless. Apart from the mental stress, it can affect your ability to earn a living for yourself and for your family. And if you lost your job or were forced to close your business because of a particular economic or political situation, then it may be something you can’t solve in an instant.
2. Urgent home/car repairs
Voluntarily remodeling or refurbishing your home is not considered a financial emergency. But if you need to repair or replace big ticket items such as your refrigerator or stove, or if your house has been damaged due to natural disasters, then they constitute a financial emergency. Attending to unexpected car repairs is likewise another financial emergency, especially if you depend on your car as your only means of getting to work.
3. Critical illnesses or accidents
Apart from being a cause for worry and distress, critical illnesses or accidents—yours or a family member’s—result not only in unforeseen medical expenses but also impact your work and income-earning ability, both directly or indirectly.
4. Untimely death
Death is a part of life and yet it never gets easier to deal with. Apart from its emotional toll on you and your family, it can also directly impact your financial situation. If you or your spouse were to pass on unexpectedly, the one left behind will have to shoulder all financial obligations without a partner. The grief of unexpected loss may also impact your mental and emotional stability.
In reality, it’s difficult to fully prepare for these emergencies because oftentimes, we’ll never know how well we can stand up to these stresses unless we’re faced with them. That’s why keeping your insurance coverage active and having an emergency fund are very crucial. Not only will they help cushion the blow of any type of money emergency; they will give you total peace of mind.
You can rest assured that your kids’ future won’t be jeopardized once you’ve set up a for them. You can focus on getting better if you have a covering your medical expenses. And you can feel at ease knowing that whatever comes your way, your family will be protected with your comprehensive .
Make it a habit to check your check and manage your policy, make sure you’re updated on your premiums, and continue to empower yourself to plan for a worry-free future now.