Evaluate risk-management strategies in a personal financial plan.

Evaluation should include

• alternatives for protection against loss (e.g., self-insurance, employee benefits, purchased insurance)
• role of insurance companies
• ways to manage the possibility of loss (e.g., avoid it, reduce it, accept it, transfer it).

Process/Skill Questions:

Thinking

• What is the importance of loss protection in your life-management plan?
• What strategies can you use to reduce financial risk?

Communication

• How do you acquire your attitudes and beliefs concerning loss protection?
• What information is needed to evaluate the strengths and weaknesses of a financial plan?

Leadership

• What circumstances would lead you to accept the possibility of loss rather than insure an asset?
• Under what circumstances would you choose to reduce a risk rather than transfer it through insurance?