Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities. – Wikipedia.
As human beings and mere mortals, we are all exposed to risks everyday and sometimes tragic things happen to good, healthy and active people like you and me.
These are the life events that are beyond our control, it isn’t surprising that most of us would know or at least would have heard of someone so active andn healthy that’s all of a sudden inflicted with a serious illness or a disability.
In August 1st of 2018, my aunt, who was an Australian citizen unexpectedly passed away while on a 3-week vacation in the Philippines due to a mosquito bite.
She was a healthy 58-year old woman, the youngest amongts my mom’s siblings and no one was expecting that her life would be claimed at a moment’s notice… not even her.
As a healthy 58 year old woman, she seemed to have a lot more years of life but then again no one knows what the future holds.
I’ve been in the financial services industry since 2013 and not until someone dear to me has passed away unexpectedly that I realized the true importance of the risk management aspect of this business.
I realized that anyone can actually pass-away anytime. The risk of death isn’t necessarily higher for the elderly or those who are ill, it is rather the same for everyone of us.
Death doesn’t seem to pick a time, date or location and it doesn’t care wether or not you have loved ones’ depending on you for financial support. It could claim our lives anytime, the best thing we can do is to manage the financial risks associated with such an event; same risks applies to disability and a serious illness.
In the case of any of these events, the best thing that anyone can do is to plan ahead by putting the necessary resources in place to minimize the financial impact of these events, even when they are least expected.
Praying, hoping or believing that it won’t happen to you isn’t a viable plan.
We have to acknowldege that as human beings, we may be susceptible to these life events and their associated financial risks to ourselves and loved ones.
Take note that if a person passes-away, becomes sick or disabled, he or she get stripped off their number one economic asset, which is the ability to work for income.
Life insurance helps you protect your loved ones’ financial security in the event that any of the breadwinners in the family should pass away unexpectedly.
Critical illness and disability insurances protects your financial security in the event that an illness or disability prevent you from doing what you do to earn a living so you don’t have to worry as to when the next paycheck is going to come and instead focus on getting well.
Being prepared is the key… acknowleding these risks helps you better manage the financial risks associated with them which gives you a solid financial foundation in building your future.