Page 218 - RISK Management IC 86

Risk Management

or less accurately, it is almost impossible to place a
monetary value on pain, suffering etc. No matter how
hard a person tries, it is impossible to avoid all risks or
even minimize all risks.

So one has to balance costs against benefits. The
ordering of those costs and benefits depend on an
individual's attitude to risk well as the size of the potential
adverse consequences.

Most people's lifetime income rarely matches his
expenditure. However prudent a person is and tries to
balance income and expenditure, his plans may be upset
by the following:
(i) however certain may be of one's knowledge of levels

of earning at different ages, unemployment,
incapacity, or death may upset one's plans.
(ii) Although death is certain, its time is uncertain, so
premature death or living beyond expectancy can
both upset the planning.
(iii) Fluctuations in price levels and inflation are very
hard to predict and even harder to plan.

Compulsory contributions, entitlements and benefits
automatically readjust to changing circumstances, such

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