What is Insurance Risk?

We talk about $10/month plus the cost of the risk, but what does that really mean?

By Monte K. Jennings – Jul 14, 2025

Introduction

Today we are going to talk about risk. First we will define risk, then we will walk through an example of how we calculate risk in layman’s terms, and finally we will discuss what the risk means to you, your family, your wallet, and most importantly your insurance premium. We will also discuss why these things are so difficult to calculate.

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