Managing Risk
"The standards under this topic cover the variety of ways that wealth, property, and income are vulnerable to loss from unexpected events and the methods available to individuals for managing these risks."
Grade 4
Managing Risk 4-1
People are exposed to risk when there is a chance of loss or harm. Risk is an unavoidable part of daily life.
4-1a. Give examples of risks that people and households face.
4-1b. Identify why people take risks.
4-1c. Estimate the losses and costs associated with certain physical and financial risks.
4-1d. Describe how valuable personal items might be lost or damaged.
Managing Risk 4-2
People who are exposed to risks often try to reduce or avoid the negative consequences of those risks.
4-2a. Recommend ways to reduce or avoid a given risk.
4-2b. Identify types of risks that are difficult or impossible for people to reduce or avoid.
Managing Risk 4-3
One way to cope with unexpected losses is to save for emergencies.
4-3a. Give examples of life events for which emergency savings could offset financial losses.
4-3b. Develop a system to keep track of personal items and handle small amounts of money.
Managing Risk 4-4
Insurance is often purchased to limit financial losses due to risk.
4-4a. Provide examples of large financial risks that people buy insurance for (e.g., health, auto, fire).
4-4b. Investigate the types of insurance commonly available for people to purchase.
Grade 8
Managing Risk 8-1
Financial loss can occur from unexpected events that damage health, wealth, income, property, and/or future opportunities.
8-1a. Describe how an unexpected event that damages health or property can impact a family’s financial situation.
8-1b. Explain how advance planning can reduce the financial impact of an event that causes damage to personal property.
Managing Risk 8-2
Insurance is a financial product that allows people to pay a fee (premium) to transfer the cost of a potential financial loss to an insurance company.
8-2a. Describe ways in which having insurance can protect a person from financial loss.
8-2b. Explain what might happen to people who cannot afford to buy insurance for a particular risk or who choose not to buy it.
Managing Risk 8-3
An insurance company creates a pool of funds from many policyholders’ premium payments and then uses these funds to compensate customers who experience a loss. People at higher risk for making a claim usually have to pay a higher premium.
8-3a. Discuss how people use insurance to share the risk of financial loss.
8-3b. Explain why insurers commonly charge higher premiums to people who are higher risk (e.g. auto insurance for drivers with a bad accident record, flood insurance for houses on the coastline).
Managing Risk 8-4
Four key insurance terms that contribute to out-of-pocket costs with an insurance policy are: premium, deductible, copayments, and co-insurance.
8-4a. Describe how each of the following out-of-pocket insurance costs affects policyholders: premium, deductible, copayment, and coinsurance.
8-4b. Given information about premiums, deductibles, copayments, and coinsurance, calculate out-of-pocket costs for a hypothetical insured loss.
Managing Risk 8-5
People can choose to avoid, reduce, retain, or transfer risk through the purchase of insurance. Each option has different costs and benefits.
8-5a. Give examples of how people manage the risk of financial loss through risk avoidance, reduction, retention, and transfer.
8-5b. Identify ways in which an automobile driver can avoid, reduce, or transfer the risk of being in a crash.
8-5c. Weigh the costs and benefits of buying cell phone insurance versus accepting the risk.
Managing Risk 8-6
Extended warranties and service contracts provide protection against certain product mechanical failures during the contract period.
8-6a. Describe types of purchases where extended warranties are typically offered as an add-on purchase.
8-6b. Analyze the costs and benefits of purchasing an extended warranty on a specific item (e.g. cellphone, laptop, or vehicle).
Managing Risk 8-7
Identity theft is the use of someone else’s personal identification information to commit a crime.
8-7a. Explain methods used by identity thieves to obtain personal information to commit a crime.
8-7b. List actions that an individual can take to protect personal identification information.
8-7c. Describe steps people can take to safely manage their finances using mobile technology
Grade 12 (Coming in the future)
Managing Risk 12-x