Preparing for Medical Emergencies

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Building and maintaining an adequate emergency fund is the cornerstone of financial preparedness

Facing a medical emergency that requires a significant out-of-pocket expense can be financially crippling.

Just recently, I was hospitalized for nearly a week due to a severe bacterial infection and recently discovered that I had an unmanageable blood glucose. After my emergency surgery and discharge, I was left with a hospital bill that was much more painful than my actual illness.

To avoid the risk of bankruptcy in the event of future emergencies, it is crucial to have foresight and take proactive financial steps. As a Registered Financial Planner, I am suggesting five key strategies to protect your financial well-being when medical crises strike:

1. Emergency fund planning. Building and maintaining an adequate emergency fund is the cornerstone of financial preparedness. An emergency fund is a dedicated savings account that should cover at least six to twelve months of your living expenses or salary, whichever is higher. For those with variable income such as freelancers or salespeople, it is prudent to save even more since we never know when our income drops or halts. When a medical emergency arises, you will be tapping into your emergency fund first to cover the hospital expenses. That way, you will not end up borrowing money from relatives or from high-interest credit card debt.

2. Get an HMO card. Having a Health Maintenance Organization (HMO) card is a great benefit from employers. Not only does it offer free annual physical checkups, it also covers your hospitalization expenses up to a certain limit, usually up to P200,000, depending on the plan that is availed of.

We never know when we fall ill, and we do not know how much our hospital bill will end up costing, and so availing of an HMO card as a self-employed or freelancer makes good sense. Usually, an HMO card is paid for annually and increases in cost as one gets older.

3. Invest in a comprehensive health and life insurance. On certain occasions, the HMO coverage is not sufficient to cover the entire hospital bill, especially if you are being treated for a critical illness. Furthermore, if you are on a “no-work no-pay” setup, the HMO does not cover your lost income opportunity.

This is where having a comprehensive health and life insurance policy comes in. Certain variable life insurance policies offer critical illness riders and hospitalization income rider policies. If you have been diagnosed with a critical illness, you will be given a lump-sum amount to spend for your recovery.

With hospital income, you will be paid a daily allowance based on the number of days of confinement.

4. Regular financial health check-ups. It is more affordable to do a quarterly health check-up instead of having a one-time big time medical emergency. Though there are medical emergencies that are due to accidents, there are things that we can do early on to prevent minor illnesses from becoming serious illnesses with accompanying complications.

Regardless of what you are feeling at the time, have your blood chemistry and other screenings done. If there are abnormal values in any of your tests, you may be prescribed medicine in order to normalize it.

It is important to note that certain illnesses do not manifest or show symptoms until it is well too late. Hence, early detection counts a lot.

5. Living a healthy lifestyle. Maintaining a good exercise regimen aside from having a healthier diet can help improve one’s overall health and blood chemistry. Do exercises that will improve stamina and strength, as your body allows it.

You do not need to spend on a gym membership in order to get fit. There are many home exercises that can be done that are available for free.

Also, it is said that the food we eat impacts the quality of our blood and body. Try to avoid excess carbohydrates, fats, and sugar. Also, drink lots of water and avoid sugary drinks, avoid smoking, and abstain from drinking alcoholic beverages.

By maintaining a healthy body, the more we are able to perform at our best and achieve our financial and life goals.

Raymond Anthony Quisumbing is a book author and a Registered Financial Planner. His mission is to educate people as to how to best manage their personal finances in order to achieve their life vision.

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