Risk Management



ValueWealth Services (VWS) can work with you to develop a risk management plan.  The plan will revolve around insuring yourself, your family, and your home against a variety and range of risks.

What events could jeopardize your family’s assets, safety, or well-being?  Have you prepared to handle those events if they should occur?  A personal risk management plan can help identify threats and how to most appropriately deal with them.  One of the techniques used in risk management is transferring risk.   With this technique, you transfer the financial responsibility for the event (fire, collision, etc.) to another party.  This is most commonly accomplished by purchasing an insurance policy to cover the exposure. 

Here is a sample of the types of risks you should be insuring yourself against and the policies for transferring risk:

  • Life insurance
  • Automobile, boat, etc. insurance
  • Health insurance
  • Disability insurance
  • Long-term health insurance
  • Umbrella insurance, as a way to cover liability risks at your home and property; in some cases, special low probability but high-impact issues may need to be added to a general umbrella policy – for example:  flood, hurricane, or tornado insurance
  • Umbrella insurance to cover you and your family during activities away from home, such as boating, operating recreational vehicles, or driving while abroad
  • If your home has been transferred to a trust, insurance to protect the assets of the trust.

VWS will help you write a Personal Risk Management Plan (PRMP).  The PRMP will contain a discussion about purchasing and managing your portfolio of insurance policies. Because the only constant is change – in your life, the life of your family members and your property, and in insurance policies and regulation – VWS will help its clients identify, understand, and manage uncertainty and risk in a user-friendly way.  This process is an increasingly important part of full-service financial planning. 

Remember that risk must be identified and insured against ahead of time.  In the management of financial assets, complete hedging or risk coverage is impractical, since removing all risk also reduces potential gain to nearly zero.  In personal risk management, this concept arises in the notion of deductibles.

In summary, here are the steps involved in formulating and implementing a personal risk management plan:

  • Define and identify risks;
  • Understand the likelihood and impact of these risks;
  • Prioritize risks from highest to lowest likelihood and highest to lowest impact;
  • Review your risk management options;
  • State the assumptions you and VWS are making in formulating your PRMP;
  • Write the PRMP and sign off on it;
  • Make decisions and implement your plan; and,
  • Monitor your risk management situation and make changes as necessary.