Is Your Emergency Fund Adequate?

Is your emergency fund adequate? Do you even have an emergency fund? Perhaps your emergency fund is adequate to pay your living expenses for a few months or replace a faulty water heater, but what if you had a major medical emergency?

If you think the most expensive thing that could happen to you is your funeral, then you need to think again. A critical illness such as cancer, stroke, or heart attack can make funeral expenses seem like chump-change. But wait! You have your health insurance, so you'll be fine -- right?

Of course, your health insurance will (hopefully) cover most of your medical expenses. However, those who have gone through a critical illness will testify that many of their costs were not covered because they were not strictly medical. Aside from deductibles and co-insurance, there is loss of income while you are not able to work, travel expenses to get to specialty treatment centers, and even hotel bills. In fact, one study revealed that 65% of cancer patients' expenses were not medical and therefore not covered by their health insurance.

The good news is that supplemental health plans that protect against such costs are readily available and inexpensive. For example, you would likely be able to give yourself or a loved one $10,000 worth of protection for approximately $3 to $30 per month depending on your or their age and the plan. Often you can select higher amounts of coverage such as $30,000 or $50,000.

Another great feature of these plans is that the underwriting is extremely simple. Generally speaking, if you have not already been diagnosed with cancer or a critical illness, then you are eligible for the coverage.

These plans generally pay the benefit amount directly to you upon first diagnosis of a critical illness so that you can use the funds as you see fit. This means you can use the money to pay deductibles, co-insurance, rent or mortgage, grocery bills, or for that exotic vacation you always wanted.

Finally, if you purchase such a plan on your own, then your coverage will be portable. If you change jobs or move, then you can keep your plans to supplement your new health insurance. Even if you are without conventional health insurance, these plans are an inexpensive way to protect yourself against the most expensive illnesses you are likely to experience.