Loss Prevention And Retention

Loss Prevention 

Periodic physical checkups, safe driving habits, minimizing both drinking and smoking, good diet, regular exercise, and other good health or safety habits will reduce the chance of death or disability. Anyone who is truly concerned about the possible tragic effects that his death or disability would have on loved ones certainly owes them the duty to take good care of himself physically and mentally. However, no amount of loss-prevention efforts can prevent death nor completely prevent all possibility of disability. Therefore, loss prevention by itself is inadequate. 

Loss Retention 

A family which does not provide for its needs merely assumes the risk and all its consequences. This is not planning but neglect, and the consequences can be severe. Unlike a physician or lawyer, an insurance counselor or insurance agent can do his client very little good after the loss has occurred. The time during which his services are most beneficial is when everyone is young and healthy, when the wolf seems furthest from the door. 

Sometimes families intentionally retain risks. The very poor may feel that they are unable to afford protection against disasters, and the very rich may feel that they do not need it. Some persons are prone to taking risks and would rather “take their chances” of having uninsured losses than put added pressures on their current budgets by purchasing insurance. Other persons feel that the ability of the wife to provide income if needed, the willingness of parents to help out, and various assets and investments owned are sufficient to provide for contingencies and thus do not seek the protection offered by professional insurers. Judging from the average amount of life insurance carried per family in the U.S. in 1969-$19,500, or slightly more than two years of that family’s disposable income