Fortunately, there are a number of techniques for handling risks. The nature of a specific risk and the circumstances (extent of exposure, available resources, and so forth) often dictate which technique, or combination of techniques, is most appropriate. Basically, there are five methods for dealing with risk. It is easy to remember these by thinking of the acronym STARR.
Sharing—Sometimes, when a risk cannot be avoided and retention would involve too much exposure to loss, we may choose risk sharing as a means of handling the risk. By sharing risk with someone else, an individual also shares potential losses. That is, the individual’s own loss may not be as great if it occurs, but the individual may have to pay a portion of the losses experienced by others.
Transfer—Risk transfer means transferring the risk of loss to another party, usually an insurance company, that is more willing or able to bear the risk. Some non-insurance transfers of risk occur, such as when one agrees to assume the risk of another under the terms of a written contract.
Avoidance—As the name implies, this technique deals with risk by avoiding the risk in the first place. This usually means not undertaking an activity that could involve the chance of loss. For example, by never flying, one could eliminate the risk of being in an airplane crash.
Reduction—Sometimes, when risks cannot be avoided, they can be reduced. Risk reduction can work in one of two ways: it can reduce the chance that a particular loss will occur, or it can reduce the amount of a potential loss if it occurs. For example, installing a smoke alarm in a home would not lesson the possibility of fire, but it would reduce the risk of the loss from the fire.
Retention—Retention simply means doing nothing about the risk. In other words, people assume or retain the risk and, in effect, become self-insurers. For example, the insured would pay a smaller portion of the loss than the insurer, such as paying a deductible.
Life Insurance – Ditch the Excuses! – LIFE Foundation
We as real estate investors need to get private money, and understand “what if I die too soon?”
This video shows that.
A Legacy of Love
Don’t wait until it’s too late. Now is the right time to learn how life insurance can help you leave a legacy of love for your family.
Life Insurance 101
Learn the basics about life insurance in a flash. Hear from a one of the nation’s top insurance advisors who will explain why life insurance is so important, help demystify the life insurance process and quickly provide you with a good understanding of important insurance terms and concepts.
To learn more about PwC Future of Insurance, click here.
Did you know that The Insurance and Investment Journal recently reported 10-year term life insurance rates have reduced in cost drastically over the years. The article cites many examples of companies that have significantly reduced their premiums.
Transamerica Life (http://lsminsurance.ca/canadian-life-insurance-companies/transamerica-life-ca…) for example, offered a 40-year-old, male non-smoker $500,000 of Term 10 coverage in 1998 at a rate of $510 per year and that same 40-year-old male non-smoker can now get $500,000 of Term 10 coverage for $365 a year.
BMO Insurance (http://lsminsurance.ca/canadian-life-insurance-companies/bmo-life-insurance), which previously sold their product under AIG Life of Canada name, would have charged that 40-year-old, male non-smoker $565 in 1998 and now offers the same plan at $380 a year. The downside for consumers, though, is that renewal premiums have risen dramatically in recent years. Ten years ago, insurance companies were charging renewal premiums that were two to three times the initial annual premium, but now many insurance companies offer renewal premiums in excess of seven times the initial annual premium.
Most life insurance companies in Canada offer similar rates among their term 10 lineup, but there can be big differences in the riders or features available on the policies. Additionally, brokers can add value by knowing how each company underwrites risk. Some life insurance companies treat certain conditions, such as diabetes or high blood pressure, more favourably than others. This is why it’s important that you work with a broker who is familiar with the underwriting process.
For further information, please call us at 1-866-605-8885.
Manulife PensionBuilder guarantees income for the rest of your life. Canadians today can look forward to a longer, healthier and happier retirement than any time in previous history. With a longer retirement comes the need to insure your income will last as long as you do.
In the past Canadians generally benefited from employer pension plans that supported their income for life. Today, Canadians have to plan for their own retirement income needs as fewer employer pension plans guarantee income for life. This is where PensionBuilder comes in. Converting all or a portion of your self-directed retirement plan, including RRSPs, TFSAs, Defined Contribution Pension Plans and personal savings, into Manulife’s PensionBuilder will give you the security of guaranteed pension income for life.
here are several types of life insurance in Canada. Find out what they are and decide which one suits your needs.
Cindy David – What Every Canadian Must Know About Life Insurance
“I’d categorize Portfolio First Aid as a serious investment primer that has the laudable, if ambitious, goal of raising the sophistication level of the general public.”
—Jonathan Chevreau, Financial Post
“Portfolio First Aid has the right pedigree as an advice tome on healthy investing. Covers the bases of portfolio balance, building wealth, investing for income and managing risk.”
—The Edmonton Journal
The financial meltdown has taken a severe toll on the finances of Canadians, and on their confidence in financial and investment advisors. Canadians need help to learn how to diagnose what is the greatest threat to their long-term financial well-being and to follow a course of treatment to recovery.
Financial First Aid for Canadian Investors is for all the battered and bloodied investors whose portfolios are in tatters and who lack direction about what to do next. By examining the lessons to be learned from mistakes made in both good and bad markets, the authors address the common and recurring investment blunders they have witnessed over many years, and offer a clear prescription for how to repair wounded portfolios.