BU121 Lecture Notes - Lecture 13: Life Insurance, Canada Pension Plan, Unemployment Benefits
Document Summary
Risk management: identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures. Types of risks: economic effects of risks, financial loss b/ of peril (hazard of source of danger), insurable risks (fire, theft, injury, lawsuit), speculative risk (chance of loss or gain without insurance against loss) Risk avoidance: staying away from situations leading to loss, stifles growth in long run. Risk retention (self-insurance): bear a risk without insurance (risk assumption); Cheaper to assume some risks than to insure against them; most risky. Risk control (risk reduction): adopting techniques to prevent financial losses. Underwriting: review process of all insurance applications and selection of those who meet the standards. Insurable interest: insurance applicant"s chance of loss if a particular peril occurs. Insurable risk: risk that insurance company will cover; must meet certain criteria: Loss must not be under the control of the insured: loss must be accidental.
