“If you are going through hell, keep going.” – Winston Churchill
Two major calamities, thousands of families affected. I can’t help but think how would these families start over. A lot of these families lost their homes, lost their livelihood and worst, lost their loved ones. Where do they go from here?
What happened to Cebu, Bohol (earthquake) and Leyte, Samar, IloIlo, Capiz and Palawan (Typhoon Yolanda) were calamities that were unexpected. Physically, psychologically and emotionally it was very hard to prepare for such tragedies. Financially though, there are ways to prepare that would make starting over ‘easier’. Don’t get me wrong, preparing financially will not heal wounds that were brought about by these disasters, but it eases the short term pain and trauma these victims will go through knowing that they were able to save enough to start a new chapter in their lives.
Set up an emergency fund. Having an emergency fund which can be used to support your day to day expenses will be very useful in situations like these. For those who’ve completely lost their livelihood, part of this fund can be used to start over. Many would say 3-6 months worth could be enough, but in cases such as these, I’d say at least 6 months worth. The key to building an emergency fund is to continuously set aside for it and maintain the habit of saving some amount that can eventually last for as long as 1-2 years.
Get a life insurance. When natural disasters strike, everyone’s life is in danger. The worst is if the life it chose not to spare is the one of a breadwinner. Unfortunately for many, life insurance would come secondary to say an auto insurance or home insurance. But come to think about it, what would be more important to your family, your life or your car/home? It is important for those being depended upon financially to secure a life insurance for their loved ones. The obvious benefit of a life insurance is its death benefit which can be claimed when the insured dies. Some other benefits one can get from a life insurance are: disability and permanent dismemberment benefits and loan benefits. All of these can be a good starting point to a new life.
Get home insurance with coverage for disasters. After Ondoy, no one really knew what Acts of God coverage is. Many thought that their basic car insurance covers such calamities. Unfortunately, it was too late for many whose cars were drifted by the floods. I can only assume that the same would be true for those whose home were insured but did not have disaster coverage riders attached to their basic property insurance. Check your property insurance to see if you have such coverage. In case you don’t, with the rapid climate change happening every year, it might be getting such cover might be worth considering.
Get insurance for your business. Looting became a problem as survivors were in desperate need of survival after Typhoon Yolanda ravaged through their homes. And I would think that for some businesses, the typhoon and eventual flooding also wiped out whatever they had. For these businesses, a non-life insurance to cover for their business could be an option. Though costs for such type of insurance coverage is quite high, the tradeoff of having a peace of mind could be well worth it.
Weeks after these calamities, let us continue to do our share and help our countrymen rebuild their lives through giving and volunteering. At the same time, being able to financially educate them as they start over is also important for them to have financial peace of mind as they try to put the trauma of these disasters behind them.
*Published in Business Mirror – November, 2013