4. Protect Against Financial Loss
and insurance can protect your financial worth if something major goes wrong.
Another way to look at risk management
is “benefit enhancement.” This means that by managing risk you are more likely to receive a benefit if something goes wrong. If you choose to ignore risks or potential benefits from managing risks, time bombs are waiting to explode your wallet and potentially cause consequences that impact you for a long time.
To help you avoid these bombs, we will:
- Identify your current financial risks
- Give examples of various ways to manage risk or enhancing benefit
- Describe types of insurance, including life, health, disability, property, long-term care and car insurance
Life is full of financial and personal risks. Examples include the risk of a serious disease, an auto accident, or a fire that destroys your home. There’s also the risk of loss of income due to a disability caused by an accident or illness. Dying young and leaving behind others who depend on your income is also a risk.
Another common financial risk is liability
for losses experienced by others as a result of your negligence (for example, poor driving habits). Damage awards often exceed $1 million if you are found to be the cause of another person’s loss or injury.