Transfer Of Risk

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Dictionary Says

Definition of 'Transfer Of Risk'

The underlying tenet behind insurance transactions. The purpose of this action is to take a specific risk, which is detailed in the insurance contract, and pass it from one party who does not wish to have this risk (the insured) to a party who is willing to take on the risk for a fee, or premium (the insurer).
Investopedia Says

Investopedia explains 'Transfer Of Risk'

For example, whenever someone purchases home insurance, he or she is essentially paying an insurance company to take the risk involved with owning a home. In the event that something does happen to the house, such as property damage from a fire or natural disaster, the insurance company will be responsible for dealing with any resulting consequences. 

In today's financial marketplace, insurance instruments have grown more and more intricate and complex, but the transfer of risk is the one requirement that is always met in any insurance contract.
Search results for

'Transfer Of Risk'

  • Practical And Affordable Hedging Strategies

    http://www.investopedia.com/articles/optioninvestor/07/affordable-hedging.asp
    ... First, determine what level of risk is acceptable. Then, identify the
    transactions that can cost effectively transfer this risk. ...

  • Intro To Insurance: Fundamentals Of Insurance | Investopedia

    http://www.investopedia.com/university/insurance/insurance2.asp
    ... your risk. Risk Financing If you decide to retain your risk exposures, then
    you can either transfer that risk (ie. to an insurance ...

  • A 529 Plan Fit For An Ivy League Education

    http://www.investopedia.com/articles/pf/09/independent-529-college-savings-plan.asp
    ... the annual rate of tuition inflation has averaged somewhere between 6-9%. The value
    afforded to parents allowing them to transfer the risk of tuition inflation ...

  • All-Inclusive Vacation Keeps Travelers On Budget

    http://www.investopedia.com/articles/pf/08/all-inclusive-vacation.asp
    ... In other words, you transfer the risk of eating, drinking and entertaining yourself
    to them. This trades a highly variable cost for a fixed cost. ...

  • CFP Study Guide - Principles of Risk and Insurance - The Risk ...

    http://www.investopedia.com/exam-guide/cfp/principles-of-risk-and-insurance/cfp2.asp
    ... 8 - 14: 8. Principles of Risk and Insurance: 8.1 Introduction to the Principles
    of Risk and Insurance; ... 9.8 Business Related Risk Exposures. 10. ...

  • CFA Level 1 Study Guide - Derivatives - What is a Derivative? ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/what-is-a-derivative.asp
    ... Profitability Ratios; 7.4 Return on Investment Ratios; 7.5 Operating Efficiency
    Ratios; 7.6 Business Risk Ratios; 7.7 Financial Risk Ratios; 7.8 ...

  • CFP Study Guide - Principles of Risk and Insurance - Introduction ...

    http://www.investopedia.com/exam-guide/cfp/principles-of-risk-and-insurance/default.asp
    ... 8 - 14: 8. Principles of Risk and Insurance: 8.1 Introduction to the Principles
    of Risk and Insurance; ... 9.8 Business Related Risk Exposures. 10. ...

  • Intro To Insurance: Long-Term Care Insurance | Investopedia

    http://www.investopedia.com/university/insurance/insurance6.asp
    ... The risk of outliving your money in this situation can be great, and one of the
    best ways to transfer this risk is to purchase long term care. ...

  • Cover Your Company With Liability Insurance

    http://www.investopedia.com/articles/pf/08/CGL-insurance.asp
    ... You cannot avoid this risk, but at least you can transfer this risk to your
    insurer through commercial general liability insurance (CGL). ...

  • No Need To Rush End-Of-Career Retirement Planning

    http://www.investopedia.com/articles/retirement/08/IRA-transfer.asp
    ... that you really need more income or liquidity or less investment risk in the ... Six
    Common Rollover Mistakes A valuable benefit of the no-impact transfer is that ...

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