Risk

Question 1

WHY DO WE NEED INSURANCE & TAKAFUL?

Answer 1

because of risk

Question 2

WHAT IS RISK?

Answer 2

A situation that involves exposure to danger

Question 3

IMPORTANT TERMS?

Answer 3

1. Peril (main cause)
2. Hazard (a situation that increases the chance of loss)
   
   • Physical
   • Moral

Question 4

TYPES OF RISK?

Answer 4

1. Pure (possibilities that can only results in loss or breakeven)
2. Speculative (possibilities that can result in loss, breakeven or profits)

Question 5

TYPES OF PURE RISK?

Answer 5

1. Personal Risk
   
   • Premature death
   • Insufficient income during retirement
   • Poor health
   • Unemployment
2. Property Risk
   
   • Direct Loss
   • Indirect Loss
3. Liability Risk

Question 6

METHOD OF HANDLING RISK?

Answer 6

1. Risk avoidance
2. Risk reduction
3. Risk retention
4. Risk Transfer
   
   • Insurance contract
   • Non-insurance contract
5. Risk sharing