1. Personal Risk Management
Chapter 6

2. Risk Assessment and Strategies
Risk - the chance of injury, damage, or economic loss
Speculative risk
Pure risk
Loss - some type of physical injury, damage to or disappearance of property
Probability - likelihood of a risk resulting in a loss

3. Risk Assessment and Strategies
Personal Risk - potential loss of something of personal value
Financial Risk – potential loss of monetary value
Risk to Financial Resources –loss of earning power or assets

4. Risk Assessment and Strategies
Risk Assessment – process of identifying risks and deciding how serious they are
Risk Strategies – plans or actions aimed at reducing, avoiding, transferring, or assuming risk
Risk Reduction
Risk Avoidance
Risk Transfer
Risk Assumption

5. Risk Assessment

6. Health Insurance
Health Insurance – plan for sharing the risk of medical costs from injury or illness
Fee-for-Service – unmanaged care , choose your provider, provider paid for service
Preferred Provider Organization (PPO) – network of independent providers
Health Maintenance Organization (HMO) – network of associated providers, emphasize preventive care
Government Sponsored Health Care

7. Health Insurance Your Role in Health Care Lifestyle choices
Naturopathic choices
Call-a-Nurse

8. Health Insurance Types of Health Coverage Basic healthcare
Major Medical
Dental and Vision
Catastrophic Illness
Long-Term Care

9. Health Insurance Costs Premiums Deductibles Copays Coinsurance
Long-Term Care
Stop-Loss Provisions
Health Savings/Flexible Spending Accounts

10. Disability Insurance
Disability Insurance – Provides income to replace a portion of normal earnings when insured is unable to work due to non-work related injury or illness
Short-term Disabliity
Long-term Disability
Social Security Disability

11. Life Insurance
Life Insurance – pays benefits to a beneficiary upon death of the insured
Beneficiary
Term Insurance
Permanent Insurance

12. Life Insurance
Term Insurance – temporary insurance, for a designated “term”
Renewable Term
Decreasing Term pays benefits to a beneficiary upon death of the insured
Level Term

13. Life Insurance
Permanent Insurance – remains in force as long as premiums are paid
Whole Life
Limited-pay Life
Universal Life
Variable Life

14. Life Insurance
Group Life Insurance
Portable Insurance

15. Protecting Property Homeowner’s Insurance Renter’s Insurance
Real property
Personal property
Liability
Inventory
Renter’s Insurance

16. Protecting Property Automobile Insurance No-Fault Insurance Liability
100/300/50
Collision
Comprehensive
Personal Injury Protection
Uninsured/Underinsured Motorist Protection
Towing/Rental Car Coverage
No-Fault Insurance

17. Protecting Property

18. Reducing Costs Higher Deductibles Change Habits/Behaviors
Combine/Reduce Coverage
Comparison Shopping
Buy Online
Timing Premiums
Piggybacking
High-Risk Pools
Discounts

19. Maximizing Benefits
Review Coverage
Umbrella Coverage

20. Umbrella Policy

21. Questions?

22. Homework