Nebraska Life and Health Insurance Practice Exam 2026 – Complete Exam Prep

Acceptance of minor risks for greater benefits embodies the concept of a planned assumption of risk. In various scenarios, individuals or businesses choose to accept certain minor risks because they can yield greater advantages or profits. This strategic decision is often a calculated trade-off, where the benefits outweigh the potential downsides of the minor risks involved.

In contrast, eliminating exposure to loss, transferring risk to another party, and completely avoiding high-risk situations represent different risk management strategies. These methods focus on either reducing risks or shifting them entirely, rather than consciously accepting them in the pursuit of higher rewards. The planned assumption of risk, particularly in the context of insurance or investment, involves a more nuanced understanding that taking on some risks can lead to beneficial outcomes.