1. Risk Avoidance is the least practical method of treating risk. We cannot sit huddled at home; we must go out on the streets and byways, fly and invest, while living our active and productive lives.

2. Risk Reduction is a common means of treating risk. It is accomplished with safety standards and zoning regulations; children's automobile restraints, etc.

3. Risk Retention is the acceptance of risk through various forms of deductibles, coinsurance, or policy limits. The more risk that is retained by the insured, the less is absorbed by the insurer and the lower the premium needed.

4. Risk Transference is the most effective way to handle risk. It is called insurance. The individual transfers much of the risk to a pool with a known premium, replacing the uncertainty of a potentially large or total loss in value.

The following questions are a review of the content on this page. Answer them and then click below to check your response.

Among the various means of handling risk, the deductibles are considered risk R .

Risk A is not a practical way to handle risk.

Life insurance is the method of T risk.

 To check your answers Click Here

Ans. Retention

 
Risk ___________ is not a practical way to handle risk.

Ans. Avoidance

 
Life insurance is the method of ___________ risk.

Ans. Transferring

 

To go back to the Course, Click on Resume

If you have missed any of the answers, go back to the top of the page and reread it. Re-Answer the questions and check them again.