Principles of Risk and Insurance

Free CFP Exam lesson in Risk Management and Insurance Planning. 14 min read, ~2,105 words.

Pure risk (loss or no-loss) is insurable; speculative risk (chance of gain) is not. Treatment matrix: low-frequency/high-severity = insure; high-frequency/low-severity = retain; high-frequency/high-severity = avoid. Risk management process: identify, analyze, evaluate, treat, monitor; treatment options are avoidance, reduction, retention, transfer. Insurable interest timing: property/casualty at the time of loss; life...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• C.17

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