🌟 Life and Health Insurance Exam Tips: Methods of Handling Risk 🌟



in thinking about risk it's important first of all to know what risk is so let's define risk risk is the potential for loss risk is the potential for loss in dealing with risk there's five different types of ways to deal with risk and we need to understand them as well first there's risk avoidance if risk is the potential for loss then risk avoidance is the total refusal to engage in behavior that leads to risk risk avoidance refusal to engage in behavior that leads to risk and therefore loss along with avoidance there is risk retention and risk retention you retain or voluntarily or perhaps in some situations involuntarily submit to the risk and you would likely do this only in situations where their potential loss is rather small you don't want to retain risk if the loss potential is large but where the loss potential is small you might agree to retain either willingly or unwillingly the risk involved next there is risk sharing in this scenario either a group of individuals or group of companies more than one comes together and they agree voluntarily to share the risk equally so if there is loss they would spread the losses equally they're all sharing in the risk together this group states that the losses suffered by one will be borne by all next you have risk reduction in risk reduction you take active steps to minimize the damage caused by risks that have a high frequency and yet low-loss taking steps to minimize the risk with the risks that have a high frequency and yet a low loss associate with them so risk reduction taking active steps to minimize the risk and then finally there is risk transfer and in risk transfer basically there is a shifting of the risk from one individual to another who is more equipped to handle the loss should the risk result in a loss so we need to understand risk versus the potential for loss and then within that we have avoidance the refusal to engage in risk retention is to submit voluntarily involuntary to the behavior only in situations where the loss would be small sharing we have a group that agrees that the loss of one would be shared evenly among all in reduction you take steps necessary to reduce risk and then finally in transfer it goes from one to another more able to bear the loss should the risky behavior result in loss you

5 Comments

  1. he should have used the acronym s.t.a.r.r that helps

  2. 6 huge chapters to do in 8 days! Any secrets on passing the state exam?

  3. did you also end up passing?

  4. did you end up passing?

  5. I need help studying for my exam I live in central florida and I would appreciate some studying tips to pass this test. Thanks

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