Prepare for the Unexpected

November 15, 2013

When I hear about natural disasters such as Hurricane Katrina or Sandy or the Japan earthquake, I feel bad for the people affected by it and donate some money, but that’s it. I move on.

A few days ago, Typhoon Haiyan also known as Yolanda, struck the Philippines. It has been cited as the greatest storm ever. Guess where the eye of the storm happened to pass through…right smack dab where about 20 of my relatives live. Luckily all of them have survived with some minor injuries, but more than 10,000 others did not. My family members are lucky to be alive, but their homes and livelihood have been destroyed. These are the kinds of events you never imagine that could happen to you or someone you know, but they do.

In August 2007, right after my wedding (during my honeymoon), I got really sick. I caught an unknown virus that was fast and vicious. I was a healthy 29 year-old at that time, but suddenly I had fluid in my abdomen, which quickly spread through my heart. I had to have emergency surgery. At the operating table, they were able to slit the pericardial window of my heart to drain the fluid, but I stopped breathing. The surgeon pronounced in his notes that my status was “very grave”. Luckily, there was another doctor who suggested that the fluid might have moved to my lungs. They quickly punctured my lungs, and when the fluid drained out, I was breathing again. I am lucky to be alive today.

Now what does all this have to do with saving and investing?

You might be going through life thinking that you are invincible. Sure you are….until something unexpected happens. It could be a car accident, a medical condition or physical injury, an unexpected death in the family, a loss of their job, etc. Because you haven’t really thought about these things, you will be unprepared when something like this occurs. Your family will be unprepared as well.

What should you do to be prepared? You need to think about whether you need insurance in the off chance you die or become disabled. You need to have taken account of which personal assets you want to insure. You need to decide on who you want to inherit your assets.

After thinking about the “what if’s” in life, you need to have a plan for each of these scenarios and determine if you need term life (whole life sucks), disability, long term care insurance. You need to review your auto, home and health insurance. You need to create a will and consider establishing a trust. You may want to have a medical power of attorney as well.

There are a lot of factors to consider for each type of insurance, so I will talk about them in further detail in future blog posts.

What possible events do you need to think about more thoroughly? What is your plan for these unexpected events?

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