Question

Preparing for the Unexpected

For each of the following life circumstances, state how you will prepare in advance to address each situation financially.

An unexpected $300 expense

Your wallet or purse is stolen and you discover there are fraudulent charges on your credit card

A car accident results in $5,000 in damages and six weeks out of work

Strong storms cause approximately $ 20,000 damage to your home

A medically necessary surgery with three days of hospitalization

Unexpected early death

Answer 1

(a) To pay for an unexpected expense, always maintain a minimum sum in your savings account & save a fixed proportion of monthly salary

(b) Take insurance cover against theft of credit card and its misuse

(c) Take comprehensive motor insurance which pays for damages of the car. Take health insurance which pays for medical bills a certain lump sum amount on accident/disability

(d) Take Property insurance that pays for damages to property in case of a natural calamity

e) Health insurance that pays for hospitalization & surgery expenses

(f) Take term insurance that pays lump sum amount to the beneficiary on early death