No one expects the family breadwinner to die early or a healthy child to suddenly become seriously ill, but tragedies happen in all types of families. These events can have devastating emotional and financial consequences. You may not be able to prevent unfortunate circumstances, but there are steps you can take to limit risk and make sure you’re ready if a tragedy happens.
Consider Your Lifestyle
Some people live in ways that are asking for trouble. You can limit the risk of early death or debilitating disease by eating better, exercising more and taking fewer risks when driving. When you set a good example, everyone in the family may follow your lead to healthier habits. Lowering your risk for catastrophic losses also includes making sure your home is safe and your financial accounts are secure from major losses because of identity theft or high-risk investments.
Build a Job Loss Fund
Financial experts push building an emergency fund to cover unexpected expenses, but a few hundred dollars is not enough to have in reserve if the breadwinner loses their job, becomes disabled, or dies. A job loss fund should include enough money to cover household expenses for six months or more. It can take several months for a family to find a way forward after tragedy takes away the primary earner.
Review Insurance Coverage
Life insurance can replace the family’s income if the breadwinner dies, but it won’t help if this person is incapacitated for months or years. Critical illness insurance coverage replaces income for months during treatment and recovery. You can use an instant insurance cost estimate calculator to help you out. The most common type of critical illness coverage is cancer insurance. Additionally, long-term care insurance can pay to take care of someone who needs care beyond what medical insurance will pay. A well-insured family also has coverage for home damage from natural disasters.
Put Documents in Place
Legal documents can make dealing with a tragedy easier and make sure that the wishes of a deceased or incapacitated person are honored. The most important documents are a complete will, a power of attorney for financial and legal matters and a medical power of attorney. Resuscitation orders, trusts, childcare authorizations and other instructions may also need to be in place. An attorney can help you get these and other crucial documents done before they’re needed.
It’s difficult to think about a tragedy in your family. It’s even more difficult to deal with the lifestyle issues that could make a tragedy more likely to happen or the financial, insurance and legal issues that could make the situation worse. Some uncomfortable moments now, however, can save you from years of problems that can’t be fixed.
Anita Ginsberg is a freelance writer from Denver, CO. She studied at Colorado State University, and now writes articles about health, business, and family. A mother of two wonderful children, she loves traveling with her family whenever she isn’t writing. You can find her on Twitter @anitaginsburg
All content on this site is the property of Taxbot, LLC, The Profit Junkie Podcast, or the author. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.