Risk is one of the major elements of the life to deal with. Everyone needs to deal with risks and there are no ways of avoiding risks in the real life. The risk can be explained as a potential that can result in gain or loss. The gain or loss is caused by any actions taken. The life continuously experiences risk at day to day activities. The number of accidents or cases that happens around us remind the consequences of risks. There are different types of risk that we do face. It can be described as financial risks, physical risks, political risks, market risks, country risks, systemic and systemic risks. (Investopedia, 2006). The financial risk is one of the most concerning risk that can lead to different types of other risks. As an individual we do face different types of financial risks such as capital, correlation, credit, overpaying risks and so on.
In the era of globalization, the term we used to describe the life had major changes. The risk can belong to the financial problems or the healthcare or any other sector. However, these risks have always been an important part of an individual life. The world always moves through the continuous changes. There may always have some changes at any part that can introduce risks. As an example, changes in the financial market, sudden rises in product price, economic drawdown, sudden healthcare issues, accidents or any other problems that has an impact on me or my family directly or indirectly can be considered as risk. The risks always keep changing and changes the impacts of it over the years. However, proper awareness and proper planning of facing risks are a useful material to face the risks. The personal experience is another useful tool to move against the risks. However, as an individual it is always important to understand the possible risks that are involved.
The life events consist the biggest portion of risks at many cases. The life events are more important to set some specific goals as well as the success and failure of a person are related to the life events. The unknown occurrences can take place on life anytime. The unknown events include accidents, disability, illness or any other natural or man-made disasters that can have an impact on the assets and income. There are few other life events to take into consideration such as premature death. The premature death of a primary person of a family can bring nightmare for the family. It will be hard for the members who depends on that person to overcome from the loss. It is always essential to have some plans that can help the family in uncertain conditions.
There is some perception based risks that we experience around us. The things are different and it doesn’t take place every day. It can only take place while the luck is not in favor. However, it is always important to have some plans to mitigate the risk that can keep oneself and the family safe during the time of the occurrences. It is the best possible way of dealing with the risks.
The risk can’t be identified with the surrounding conditions or the current situations in many cases. As an example, a person can be identified as fine in the last healthcare checkup but there are still possibilities of risk that can take place at the late stage of the life. However, risk mitigation plan is the best way of dealing with that uncertain situation. It can be helpful to cover the costs of any future healthcare issues or any other risks that caused by the health related problems.
The risks related to life and health can be considered as the most important risks since the other risks will only take place or impact a person only while they lead a life. The risk mitigation plans require to have a healthcare insurance policy for all the family members with the full coverage at any issues that can cause by accident or any other means. This plan will help the family to keep itself safe at the uncertain events that can cost a lot of money as medical expense. The family will be able to keep themselves out of financial burden at the worst times. (Hungelmann, 2004). The family will be able to deal with any health care issues or any other injuries that can be caused by different types of accidents or life events.
The second risk mitigation plan needs to be developed for the house and the finance. The house is the most important element of human life. Everyone needs a place to live in order to survive. It is essential to have some risk mitigation plan that will cover all the expenses of a family at the time of uncertain events that may have an impact on the place of living. The insurances or any other supportive approaches of dealing with this risk will work as the solution at any uncertain events. It will be helpful to get oneself out of trouble with less effort.
The financial risks take place while some uncertain events can have impacts on the businesses or any other source of income. The financial risks can take place by losing in the business, losing the job, dramatic fall of the economy and so on. (Jonathan, 2012). The risk mitigation plan in this case will require someone to have some savings that can be used at this event in order to get support and restore the financial situation.
The paper suggests that the risks always arrive to us in an uncertain manner. No one knows perfectly about the timing while it will strike. It is always important to get ready with a risk mitigation plan in order to act quickly in order to reduce the problems that can be caused by risk. The investments of a little portion of income on risk mitigations bring good impact at the time of danger. The risk can be handled properly only by having a proper planning else it will bring worst scenarios.
References
Hungelmann, J. (2004). Personal Risk Management: An Overview | IRMI.com. [online] Irmi.com. Available at: https://www.irmi.com/articles/expert-commentary/personal-risk-management-an-overview [Accessed 22 Aug. 2016].
Investopedia, (2006). Risk and Diversification: Different Types of Risk | Investopedia. [online] Investopedia. Available at: http://www.investopedia.com/university/risk/risk2.asp [Accessed 22 Aug. 2016].
Jonathan, (2012). Risk Management for Financial Planning - True Financial Planning. [online] True Financial Planning. Available at: http://www.truefinancialplanning.com/risk-management-for-financial-planning/ [Accessed 22 Aug. 2016].
