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For each event listed below, rate the potential
financial severity and the probability or frequency of the event at
this time in your life. For our purposes, we are concerned only
with negative financial impacts. If you do not rate an event for both
financial severity and probability, that event will not appear in the
results here or in the other sections of this activity. If you believe
that an event is not applicable to you (e.g., "job loss" if you are
already retired), leave it blank.
When rating the financial severity of an event,
ignore any insurance that you have. For example, rate "disability
for the breadwinner in your household" as financially devastating,
even if you have an excellent disability insurance policy. Use these
definitions to help you rate the severity of an event:
| 1 |
Financially
devastating, possibly resulting in bankruptcy |
| 2 |
A
huge financial impact that would radically change your lifestyle |
| 3 |
An
uncomfortable but manageable financial impact |
| 4 |
Very
little financial impact; you could cover it with an emergency fund |
Use these guidelines to categorize the probability
or frequency of an event:
| 1 |
Almost
certain to happen, or happens very frequently |
| 2 |
More
likely to happen than not to happen, or happens often |
| 3 |
Could
happen, or happens infrequently |
| 4 |
Unlikely
to happen, or almost never happens |
Let's look at one event as an example. If you
are a young parent with pre-school children, you are the major breadwinner
in your family, and you have no life-threatening health problems, then
you will probably rate the financial impact of your death as a 1 or
2 (ignoring for the moment any life insurance you have) and the probability
a 3 or 4. However, if you are 90, in poor health, and have no financial
dependents, you will likely consider the financial severity of your
death either a 3 or 4 and the probability a 1 or 2.
Not all risks are listed, and you may have risks
that are unique to your situation. Please type additional risks you
wish to consider in the spaces marked "Other." For example, you may
have risks stemming from business activities or hobbies.
Now, rate the financial severity and probability/frequency
of the following events. Remember, you can always return to a step after
you've completed it by clicking on the buttons at the bottom of the
page.
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