the chance of injury, damage, or economic loss
risk
a physical injury, damage to property, or disappearance of property or other assets
loss
the likelihood of a risk resulting in a loss
probability
the process of identifying risks and deciding how serious they are
risk assessment
finding ways to lower your chance of incurring a loss
risk reduction
stopping behavior that leads to a risk
risk avoidance
passing risk to another party
risk transfer
the price you pay for insurance coverage
premium
accepting the consequences of risk
risk assumption
setting aside money to be used in the event of injury or loss of assets
self-insure
a plan for sharing the risk of medical costs resulting from injury or illness
health insurance
a type of health insurance plan that allows patients to choose any doctor or other provider for medical services
fee-for-service plan
a group plan that provides prepaid medical care for its members
health maintenance organization (HMO)
a network of independent health care providers that band together to provide health care services for a set fee
preferred provider organization (PPO)
an insurance clause that sets a maximum that the insured has to pay out of pocket during any calendar year
stop-loss provision
insurance that provides income to replace a portion of normal earnings when the insured is unable to work due to a nonwork-related injury or illness
disability insurance
insurance that pays money to a beneficiary upon the death of the insured person
life insurance
the person designated to receive money from a life insurance policy
beneficiary
a policy that remains in effect for a specific period of time
temporary life insurance
a policy that remains in effect for the insured’s lifetime and builds cash value
permanent life insurance
a policy that protects property owners from risk of loss to their real and personal property
homeowners insurance
protection against injuries suffered by others while on your property or as a result of your actions
liability coverage
a list of items of value in your home; used for insurance purposes
home inventory
the cost of replacing an item regardless of its actual cash (market) value
replacement value
