You should be financially ready for these life exigencies

 No one is spared from the wrath of an emergency, they claim. You might prepare very well to buy a home, finance the education of children, etc., and you would have nailed all the right investment instruments to save for it. But if you were to face an unexpected situation such as a work loss, family death, etc., which you are not prepared to handle, all your hopes could crumble and funds could be drained.

Being prepared is the only way to go about it. Without upsetting any of the long-term plans or throwing you into a debt trap, a liquid fund worth six to 12 months of your cost could save you from an emergency situation.

Here are five emergencies for which you have to prepare:

Health Emergency: Hospital and medical costs have been shooting up over time and all your savings could be exhausted if an emergency hits you. For that matter, a suitable health policy could financially support you during a health emergency or a chronic disease.

If you already have health insurance, by purchasing vital insurance, you will take it a step higher. The sum guaranteed on diagnosis of a serious disease is paid out by a critical insurance plan and the money can be used not only to fund the medical costs, but also to carry out family and self day-to-day expenses.

When you need to receive emergency care from a hospital that your insurance provider is not enrolled in, you need to have a contingency fund in place before you seek reimbursement to cover the expenses. In this scenario, the go-to investment instrument will be fixed deposits and liquid mutual capital.

Work loss: Job loss can happen to anybody at any time as a result of changing the strategy of the company, losing business partners, changing customers, etc. If you lose a job, investment instruments such as mutual funds (7-8 percent return p.a.), sweep-in fixed deposit accounts (7 percent return p.a.) and Systematic Mutual Funds Investment Plan (12-14 percent return p.a.) with low risk and moderate return will meet daily bill expenditure before you land another.

Death of a family member: The financial challenge that often occurs with the passing of an earning member may be cushioned in the form of a term policy with a contingency fund to ensure that the income is replaced in the event of their demise. In terms of loan reduction, EMIs, children's education funds, other monthly costs, etc., you can decide the size of the fund depending on the requirements of your family.

Natural Calamity: A house and the property inside can be destroyed by natural calamities such as earthquakes, floods and burning. Although the tragedy can scarcely be prevented, home insurance, which covers house repair and inside contents, can help you better cope with the situation financially.

Travel Emergencies: Can you imagine what it would be like to be trapped in an unfamiliar land in a mess due to baggage loss or disease? If you were to face some emergencies while travelling, a travel policy in place might financially rescue you.