Risk Topics – Risk Factor Classification

Risk Topics
The risk an individual faces may be a combination of various factors: the risk of death and accidents, the threat of natural disasters, and market volatility. In terms of personal well being, some risks may affect life expectancy and result in temporary or permanent disabilities.
Risk Factor Classification
After identifying risk factors, they must be assessed and classified. The most common assessment system points to various levels of acceptance of risk factors:
  • Critical: Exposure to risk may result in serious losses.
  • Important: Losses would not be catastrophic, but they would compromise financial stability.
  • Unimportant: Risks resulting in losses that may be easily covered with existing assets.