Map the losses that matter
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The idea in everyday life
Identify financial risks worth transferring before selecting an insurance product.
Insurance means paying an insurer to cover certain losses under a contract. Compare losses you could cover from savings with losses that could seriously harm your finances.
One step at a time.
Use the sample or information you have permission to use. Keep your work as you go. You can pause between steps.
- 1
List people, income, housing, vehicles, property, health access, liability exposures, and debts that could create a serious loss.
- 2
Estimate consequence and likelihood without pretending the numbers are exact.
- 3
Mark risks already controlled through savings, employer benefits, contracts, or existing policies.
- 4
Prioritize gaps that could threaten essential living costs, legal obligations, or dependents.
See how it works.
Sam ranks liability after a serious auto crash and loss of household income above replacing a $400 phone, which can be covered from savings.
Did you cover these?
- Your work includes a household risk map ranking exposures by potential consequence, current control, and unresolved gap.
- Check this common mistake: Buying whatever product was advertised without first identifying the specific loss it is meant to transfer.
- Every coverage under consideration corresponds to a named risk and a reason that self-funding may be unsafe.
What to finish
A household risk map ranking exposures by potential consequence, current control, and unresolved gap.
Watch for this
Buying whatever product was advertised without first identifying the specific loss it is meant to transfer.
How can I tell I understand it?
Every coverage under consideration corresponds to a named risk and a reason that self-funding may be unsafe.
Quick knowledge check
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
Go to the knowledge checkOptional course overview video
What Is Insurance?
From Insurance Learning Services. Watch here or open it on YouTube .
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