Looking to financially prepare for medical emergencies? Here are 5 things to remember

While one can never fully be prepared for the worst, it helps to have measures in place to secure a safety net that can help reduce any damage.

Nothing is more important than our health. We need to be financially ready to handle whatever life throws at us. In recent times, the Covid-19 pandemic and its impact have added impetus to the importance of being financially prepared for medical emergencies.

Today the job market is at the peak of vulnerability and a regular source of income may seem vulnerable to some.

The last thing to top off all worries would be a sudden medical emergency at hand. Hence, it is vital to be financially prepared for medical emergencies.

Here are a few steps that can help you get started:

1. Build an emergency fund

The first step to preparing for a financial emergency or unexpected life event is to build a solid emergency fund. An emergency fund can be crucial in aiding in dire moments of need.

Not to be confused with regular savings, emergency funds are usually equivalent to at least 6-8 months of monthly expenses. You can create an emergency account by investing in securities that are highly liquid while allowing your money to grow.

Additionally, you can park it in instruments like Debt mutual funds, short-term fixed deposits, or a high-yield savings bank account!

2. Get adequate health insurance

Given the rising healthcare expenses, each individual needs to opt for a healthcare plan to meet medical expenses without derailing their finances. Health Insurance is one of the most preferred ways to financially prepare for medical exigencies.

It is important for everyone to have health insurance coverage but even more critical for a woman to avail of health insurance as research suggests that women tend to live longer than men but also paradoxically have more diseases in comparison to men.

Years of worry, add to ailing health, but having adequate health insurance will help you lead a stress-free life.

3. Have term insurance if you have liabilities, debts

In case you have debt and liabilities, it’s better to avail of term insurance as it acts as a safety net for your family. In case of death, the insurance claim can provide financial stability to the family and the money can be used to pay off any outstanding debts and liabilities.

You could also buy a personal accident cover to protect your family from income loss due to permanent disability.

4. Build more than one source of income

The economy is currently experiencing high and widespread inflation. Earnings that you get from a rental property, selling digital products, side hustles, etc., can aid in building an additional source of income. In the market, today when job security is at its absolute minimum, having a passive income can help strengthen your safety net and provide security for any medical emergencies. For women, this is a fail-safe way to secure the financial future of their families.

5. All financial documents in one place

Keep all financial documents in one place and ensure all family members are aware of it. In times of medical emergencies, it becomes difficult to keep your composure and collect all the necessary documents that you might need.

Keep everyone at home and trusted ones informed of the location of all your key documents for supplying anything necessary at the hospital. This is a small but important step that can help ease a little of the panic at that time.

The hour requires us to be mindful of our financial and physical health and to be ready for any contingency. It’s important to start investing for your financial health by creating an emergency fund and making sure you have insurance to provide financial stability in times of need.

Be better prepared!

(The author is the Founder and MD of LXME – India’s First Neobank for Women)


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)