Risk management: What’s the worst that could happen?

Risk management means thinking of the worst that could happen, then deciding how to address the risk. Some risks are best avoided, some should be reduced, some should be insured and some should be accepted. Your response depends entirely on your personality.
Some risks that are suitable to being insured are the risk or premature death and disability. You can pay a premium and, if you suffer loss, you can receive a sum of money. This is useful if you have family that depends on you. Planning can help in the case of a premature death or a divorce, in order that your wishes are carried out.

One risk that you would do well to accept is the risk of a drop in the market value of your investments.