Risk Management Basics
The possibility of financial loss.
What is Risk?
Insurance designed to last a specific number of years.
What is Term Life Insurance?
Insurance designed to replace lost income due to illness or injury.
What is Disability Income Insurance?
Emotion most responsible for investors selling during downturns.
What is Fear?
Represents ownership in a company.
What is a Stock?
The process of identifying and evaluating potential losses.
What is Risk Management?
Permanent insurance with level premiums and cash value accumulation based off of dividends.
What is Whole Life Insurance?
The waiting period before benefits begin.
What is the Elimination Period?
Emotion often causing investors to chase performance late in bull markets.
What is Greed?
Generally considered a loan to a corporation or government.
What is a Bond?
Insurance is primarily designed to do this.
What is Transfer Risk?
The amount paid to beneficiaries at death.
What is the Death Benefit?
The maximum period benefits are paid.
What is the Benefit Period?
Investing a fixed amount regularly regardless of market conditions.
What is Dollar-Cost Averaging?
Investment known for the greatest long-term growth potential.
What are Equities?
The most insurable risks typically have this characteristic.
What is Predictability?
The person entitled to receive policy proceeds.
What is a Beneficiary?
Definition determining inability to perform your own occupation.
What is Own-Occupation Disability Coverage?
The tendency to feel losses more strongly than gains.
What is Loss Aversion?
Investment typically considered least volatile.
What is Cash or Cash Equivalents?
A risk that cannot be financially insured against.
What is Speculative Risk?
The amount required to keep coverage in force.
What is a Premium?
A business policy designed to help pay expenses during an owner's disability.
What is Business Overhead Expense Insurance?
One of the most valuable services an advisor provides during volatile markets.
What is Behavioral Coaching?
The relationship between bond prices and interest rates.
What is an inverse relationship?