Financial advisors often stress the importance of creating an emergency fund. In this economy, filled with job stress, global uncertainty and fallen business profits often still struggling to reach pre-2008 levels, the wisdom of setting aside six months’ worth of expenses into an emergency savings account is not lost on the average individual. What may be lost on the average person, however, is the actual ability to save that much money when trying to support a family and pay off debts.
An emergency savings account is not the only type of emergency fund that one should consider. Another more affordable way to create an emergency fund is to invest in insurance policies that protect the value of your assets in the event they are lost, stolen, or damaged during an insurable incident.
The Value of Insurance
Imagine how expensive it would be to rebuild your home after a hurricane, tornado or fire. Even with a full emergency savings account it’s doubtful you could afford to pay this expense out-of-pocket. However, for a very small annual premium you can purchase a home insurance policy that does just that. This home insurance policy can even be designed to protect the value of your contents and may pay for loss of use if you are displaced by the insurable incident.
And what about your car? If you were to total your car or if it were to be stolen, could you afford to buy a new one? An auto insurance policy can work as an emergency fund reimbursing you for the value of your car when totaled during a covered peril, paying for a rental car, paying for certain repairs, and even covering your liabilities.
Your family faces an emergency event should you pass away. After your death, how would they replace your income, your contribution to the family, pay for your funeral and reach the future financial goals you set?
A life insurance policy creates a much-needed emergency fund for your income loss and funeral expenses.
A disability insurance policy creates an emergency fund for income replacement should you become disabled in an event that is not related to work. You can choose short- and long-term disability policies and create a more flexible, accessible benefit than social security provides.
Your Oklahoma City Insurance is a vital component in any emergency plan. Give us a call at Alexander & Strunk and find out all the ways that affordable insurance policies can be designed to provide the protection you need at the time that you need it.