Income Protection Insurance
It’s worth asking yourself whether you could cope financially if you fell seriously ill tomorrow and were unable to work for months or even years.
An emergency fund can help ease a situation on a short-term basis, but most people don’t have readily available funds to see them past a few weeks.
Income Protection Insurance safeguards you and your family against the negative financial circumstances that arise through sudden loss of income. The policy provides a steady income that will help you to cover mortgage, rental or living costs, buying you valuable time to get back on your feet.
Rainy day fund
Even when you have invested in suitable insurance coverage, it is still important to have a cash emergency fund of three to six months’ salary.
Should the worst happen, like job termination or loss of income, you are effectively giving yourself a buffer zone to cover your bills.
Keep your emergency fund parked in an instant access current or deposit bank account so that it is always readily available, keeping in mind that UAE accounts can be frozen when jobs are terminated. The beauty of an emergency fund is that you may also never need it. In which case, it’s a great way of building up your savings too.