MANAGEMENT

Detailed explanation-1: -Risk transfer is the process of accepting the consequences of risk. Life insurance typically becomes a higher priority for people as they enter their retirement years and their children marry and start lives of their own. Generally, the higher the deductible, the lower the insurance premium.

Detailed explanation-2: -Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.

Detailed explanation-3: -Risk transfer can be of mainly three types, namely, Insurance, Derivatives, and Outsourcing.

Detailed explanation-4: -The purpose of risk transfer is to pass the financial liability of risks, like legal expenses, damages awarded and repair costs, to the party who should be responsible should an accident or injury occur on the business’s property.