Appropriate risk management
![適切なリスク管理](risk.jpg)
This image was created by a team member
What is appropriate risk management?
In risk management, the key is insurance.
Insurance is a huge amount to pay, also known as life's three major expenses.
But not necessarily high when considered in terms of risk!
The most important aspect of considering insurance is determining where to insure.
How to identify insurance
To begin with, insurance is a system whereby you pay regular premiums for "low probability but high loss accidents or damages" and the insurance company will pay for them if you are involved in such an accident.
So how can we identify insurance?
The bottom line is to have "insurance that insures against low probability but high loss.
Examples include life insurance, liability insurance, and fire insurance.
Various other insurance products are also available.
Consider the probability and loss for each and choose an insurance product.
Type of Insurance
There are two types of insurance: public and private.
public insurance
Public insurance is insurance administered by the government.
Japan has "universal health insurance," which means that all citizens are covered by insurance.
In addition, the insurance coverage varies depending on the occupation.
- Company employees and public employees: Health insurance
- Managers and sole proprietors: National Health Insurance
- Elderly (age 75 and over): Late-stage medical care system for the elderly
This is how it looks like.
About Pensions
In addition to insurance, the concept of "annuities" is also important in risk management.
In a nutshell, a pension is a pension plan in which one enrolls and pays from a young age for old-age benefits that, in principle, can be received from the age of 65.
In other words, it is a way to prepare from a young age for the risks of old age.
In principle, these funds are managed by the government or companies, but you can also manage them yourself through a system called iDeCo.
*Pension is compulsory at age 20 and above.
Type of Pension
Pensions can be divided into three types.
public pension
- National Pension: Pension in which all citizens are enrolled (compulsory)
- Employees' Pension Insurance: Pension plan for company employees and public employees
Company defined contribution pension plan (company employees only)
The defined contribution pension plan is a defined contribution pension plan in which companies manage retirement funds that cannot be covered by the public pension system alone.
A defined contribution pension plan is a plan under which you contribute a fixed amount of money and the amount of pension you receive in the future depends on your investment performance.
defined-contribution pension
The aforementioned iDeCo is this individual defined contribution pension plan.
One of the advantages of iDeCo is that it not only allows you to manage your own pension, but also offers tax benefits.
*There is no tax on investment income invested in iDeCo.
Image of Pension
![](ideco.png)
This image was created by a team member
summary
Here we have learned about insurance and pensions.
These institutions are deep and rigid, but they also have an interesting side.
We have explained the basics of the basics, and from this point on, your knowledge will deepen depending on your initiative.
Please keep researching what you are interested in!
We hope this site will serve as such a catalyst.
before next