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Part III: How to Plan > The Element of Risk

Chapter 15. The Element of Risk

Risk is the measured possibility of experiencing a loss, an injury, or some other unfavorable outcome. Insurance companies use risk factors to determine how much they’re going to charge for their policies.

You face calculated risks every day of your life in everything you do, including the risk of being in an auto accident, catching a cold, or losing money in the stock market. They’re called calculated risks because you take the risk knowingly. You have calculated the advantages versus disadvantages.


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