> For the complete documentation index, see [llms.txt](https://docs.takadao.io/takadao-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.takadao.io/takadao-docs/part-b.-takadao-the-daos/04-underwriting-and-risk-management-algorithm/risk-and-the-benefit-multiplier-bm.md).

# Risk and the Benefit Multiplier (BM)

There are two categories of risk that affect a benefit payout – individual risk and portfolio risk. From a member’s perspective, consider individual risk as being the risk of I, the member, passing away; and portfolio risk as the risk of other people passing away. 

The benefit payout in the event of a successful payout request is calculated as follows: 

<table data-header-hidden><thead><tr><th></th><th width="69"></th><th></th><th width="76"></th><th></th><th width="73"></th><th></th></tr></thead><tbody><tr><td>Benefit payout</td><td>=</td><td>Base Benefit Multiplier (B.BM)</td><td>x</td><td>Benefit Multiplier Adjuster (BM.A)</td><td>x</td><td>Individual Annual Contribution</td></tr></tbody></table>

<figure><img src="https://lh7-us.googleusercontent.com/docsz/AD_4nXc5vc-3yljViW4rrOscnmq5DrYzk1u6nRKzpkm1kPuXvpp703f2Zk0C7JhkvmqBASsDypCbS-6o72uFYdkDPr-uBKOCW-CGrV58SO-l1miiBh087kmgebMhsGb7RZG6czTRSWYKjJkxV8kgZw472yKlday-?key=ANIS1ST1ItkXCqB9L9mbyg" alt=""><figcaption></figcaption></figure>