Risk Transfer

Published: | Updated: March 28, 2017

Definition - What does Risk Transfer mean?

A risk transfer occurs when one party pays a certain amount of money to another party in exchange for the second party taking on a risk from them.

The insurance business is built on risk transfer: by purchasing an insurance policy, the policyholder transfers risk to an insurer.

Insuranceopedia explains Risk Transfer

People often buy insurance and participate in risk transfer when they believe that their particular risks will be too costly. Health care, for example, can be extremely expensive and difficult to manage personally, so many people purchase health insurance policies to help them manage these costs.

How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

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