Public Insurance

In risk management, we need to realize that all things in this world are at risk for damage, including ourselves. Therefore, we need to analyze what are risks that exist, how much chance of any such occurrence, along with how big losses will be experienced. For the risks that could cause large losses or have a high chance, we need to prepare a plan of anticipation for our regular lives do not let too much annoyed if damage occurs. As an example, consider the following story:

Emergency Fund
Emergency fund is the amount of money you intentionally set aside for use in an emergency. These funds typically stored in the form of savings with the special account should not be withdrawn if not in an emergency. The advantages of emergency funds are that these funds are your savings. Money in emergency funds will still be yours if not catastrophe. And you can use this money for anything you want. Meanwhile the lack of emergency funding is needed discipline to periodically save the money to the account of an emergency fund. And discipline is also necessary to enable an emergency fund is really saved, not drawn for daily necessities. However, the biggest shortage of emergency funds is the limited amount of money can you save as an emergency fund. In cases like James above, emergency funding would not be enough to replace all the financial losses suffered by James. In this case, you need to consider other ways of risk management. Read the rest of this entry »