Risk management, as defined by Wikipedia is the identification, evaluation, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) 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.
Now, that definition is a bit more complicated than I anticipated but that definition couldn’t be more specific!
As human beings and mere mortals, we are exposed to risks everyday. Sometimes tragic things happen to good people and more often than not, active, healthy people gets inflicted with some sort of disability or a serious illness.
My dear aunt, for example who was an Australian citizen and was generally healthy went for a 3-week vacation in the Philippines but she never came back all due to a mosquito bite.
She was infected with dengue and chikungunya viruses that claimed her life in two weeks. She passed away in a hospital in the Philippines two just two weeks after infection, none of us and probably even herself expected that she would pass away because everyone thought it was a simple case of dengue where most adults survive.
Our whole family was devastated by her lost and only about 18 months before her death I was advising her about getting in place final expense life insurances for herself and her husband as well as the importance of a Will. That was her wedding week with her new husband and I was glad to have attended their wedding though it was continents away from Winnipeg.
She was 59 when she passed away, the youngest amongst my mom’s siblings, I thought she had a good, solid twenty years to live on and one of the things she wanted to do is to visit us here in Winnipeg in the next couple of years.
She seemed to have a lot of years of life but as they say, life happens and bad things, sometimes happen to good people.
I’ve been in the financial services industry since mid 2013 and not until someone dear has passed that the true importance of managing risk was emphasized to me head on and in my face.
With my dear aunt’s unexpected passing barely a month ago as of this writing, I’ve realized that anything can happen to anyone; any human can actually die anytime.
Death doesn’t seem to pick a time, date or location and it doesn’t care wether or not we have small kids or when we’re old and gray; when it happens, it happens and I supposed it’s the same case with a serious illness or disability.
Perhaps the best thing that anyone can do is be prepared and plan ahead by putting the necessary risk management measures in place in the event of the unexpected, even when they are least expetect.
Praying, hoping or believing that it won’t happen to you isn’t a viable plan.
We have to accept that fact that as humans, we are vulnerable against serious life events hence, we have to implement the necessary hedge to minimize the financial impact that these events can bring to ourselves and our loved ones.
Living benefits like a critical illness and a disability insurance ensures that if in the event that you or your spouse gets inflicted with a serious illness or a disability, which can affect your ability to earn a living, you need not worry about money and instead focus on getting well.
A solid life insurance policy on the other hand helps protect your loved ones from the financial risks of death of a breadwinner, which is probably the worst event that a family can go through.
Being prepared is the key! Even when we never want any of these things ever happening to us and our loved ones.
Read more about these top 3 risk management plans and how they can benefit you and your loved ones.