If an emergency happens, your family will be able to rely on three sources of income:
- Available funds from your account
- Investments that can be liquidated in an emergency
- Claims from insurance policies
Deposits easily available for withdrawal
It's advisable to have available funds equivalent to three to six times your monthly income that you can withdraw immediately for emergencies.
Making fixed-term investments with the money you can spare on a regular basis is a good way of planning for your long-term goals, but this also implies that these funds cannot be withdrawn easily as early redemptions could result in financial losses. Assess your investments regularly to ensure they meet your current requirements.
Insurance plans are comprehensively and frequently used for health and accident coverage to tide you and your family through difficult periods of illness and health issues.
In the unfortunate event of a death, term life or whole life insurance policies will provide your family with a financial pay-out, which can be used to pay off debts or loans, pay for your child's education or take care of other daily expenses.
If you fall ill, critical illness insurance plans can offer a strong level of security too. This is why it's important to verify the terms and conditions of your insurance policies and be clear of the scope of coverage they provide.
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