I need a 100 word reply to each of the following 8 post. This looks like a lot but its only 800 words total.

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 Real estate is constantly fluctuating throughout the years, but it always appears to bounce back. The demand for a house will always be there, but it is important to be aware of the risks involved with using real estate as an investment. It can remain a solid investment over time if you are able to allow for that time to take its course of action and location being the most important. Real estate can be a good investment because you can hedge against inflation, have limited financial liability, no management headaches, and financial leverage. A disadvantage is dealing with taxes, but if it is done right you can have great tax deductions with mortgage interest which increases the financial benefit of home ownership.

                Commercial property is one of the several real estate investment vehicles. This includes land and buildings such as apartments, duplexes, hotels, stores, and office buildings. These types of investments produce a lease or rental income. There is also indirect real estate investments which is when you invest in real estate investment trusts, real estate syndicates, and participation certificates. A real estate investment trust is similar to a mutual fund. It is a pool of investors that with their money you produce construction or mortgage loans. Real estate syndicates are partners who buy properties. Participation certificates is an investment in a pool of mortgages that are owned by government agencies.

                Being involved in real estate can add another investment into your financial portfolio. It has been proven that housing rates are going up and it is expected to increase significantly with the boomer nation. By investing properly in real estate, you are providing yourself with another form of income. In more simple terms it is adding another tool to your toolbox.

References:

Kapoor, J.R., Dlabay, L.R., & Hughes, R.J. (2012). Personal Finance (10th ed.). New York: McGraw-Hill Irwin. ISBN: 9780073530697

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“Estate planning is a definite plan for the administration and disposition of one’s property during one’s lifetime and at one’s death” (Kapoor, Dlabay, & Hughes, 2012). This means before you pass away you need to legally handle where all your essential belongings will be given to after you leave earth. This is usually done when you are ready to retire but this could be done when getting a divorce as well. This can be a very complicated agenda and that is why it is important to pay a professional attorney to help split the possessions evenly.

Trusts are a good thing to have when you have a large home and assets that needs to be managed safely. “Basically, a trust is a legal arrangement through which a trustee holds your assets for your benefit or that of your beneficiaries” (Kapoor, Dlabay, & Hughes, 2012). “Trustee services are commonly provided by banks and, in some instances, by life insurance companies” (Kapoor, Dlabay, & Hughes, 2012). A will is important to ensure that a certain person(s) will receive their estate after they pass and it is in writing. A will can be changed throughout your life it is important to hire an attorney to help legalize your will. If you die without a will they will investigate to see who your family was starting with your spouse then children and so on.

References

Kapoor, J.R., Dlabay, L.R., & Hughes, R.J. (2012). Personal Finance (10th ed.). New York: McGraw-Hill Irwin. ISBN: 9780073530697

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Estate planning involves deciding what will happen to your assets in the event of your death.  People accumulate assets over their lifetime and before their death they must determine how those assets will be distributed.  This is normally done by creating a will, which is a legal document outlining exactly where your assets are to be dispersed (Kapoor, Dlabay, & Hughes, 2012).  Without a will or a trust, the state will decide how your assets will be divided no matter what your wishes may have been.  A trust is having a trustee, either a person or a bank trust department, manage your property and assets for you or your beneficiaries (Kapoor, Dlabay, & Hughes, 2012).  There are many different options when it comes to estate planning and depending on your situation different options may be better.  Since wills or trusts are legal documents, it is a good idea to have a lawyer assist you to make sure everything is done properly.  Incorrect paperwork, wording or many other issues can cause problems after your death.  Life insurance can be used as a trust.  This is something that you set up while you are still alive and your trust will receive your benefits after your death (Kapoor, Dlabay, & Hughes, 2012).  Many people do not think about estate planning because it is a topic they do not want to discuss or they feel they do not have any assets to pass on.  Everyone should have an estate plan no matter how many assets you have, otherwise there can be a lot of tension among loved ones after your death and often your assets will not be dispersed the way you had wanted. 

Kapoor, J.R., Dlabay, L.R., & Hughes, R.J. (2012). Personal Finance (10th ed.). New York: McGraw-Hill Irwin.

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Decreasing term life insurance would be a great choice for mortgage life insurance, according to investopia (2016) “which pegs its benefit to the remaining mortgage on the insured’ home”. The structure of a decreasing term insurance is that the policy is paid for before coverage expires, this is a way to avoid paying for the smallest amount of coverage by the end of the term (Rejda, 2011).

Ordinary life insurance would be best suited for individuals that require lifetime coverage, or pay least past the age of 70 years of age (Redja, 2011). The structure of ordinary life insurance, is developed that it can be used as a way of saving money and would be paid upon the death of the insured. Ordinary life insurance would be best suited for young individual which like the option on cash in the policy.

A universal life insurance is considered a more flexible type of life insurance than other life insurance policies. The policy holder of a universal life insurance has the option to determine the amount and frequency of the premium payments the only exemption is the first premium payment (Redja, 2011). Another aspect of the insurance is that the insurance holder can withdraw cash and separate the protection from the saving component (Redja, 2011). Individuals, with a flexible income would chose a universal life insurance policy.

Variable universal life insurance, are similar to the universal life insurance, the insurance holder chose how the premiums are invested and the only however, the investment has no guaranteed return on the investment but the return on the investment is tax free. The profits are hold until the death of the insured death and are still tax free.

References

http://www.investopedia.com/terms/d/decreasing_term_life.asp

Rejda, George E. (2011) Principles of Risk Management and Insurance 11th edition. Boston, MA. Pearson Education Inc.

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Decreasing term life insurance is better suited for younger people who are looking for a way to provide their families with some financial assistance (Decreasing term, 2015). One reason that this type of insurance is better for younger people is that it is inexpensive and renewable. Also, the payments end before the insurance expires or decrease as the policy matures (Redja, 2011).

            Ordinary life insurance is best suited for individuals that need lifetime coverage, or at least coverage past 70 years old (Redja, 2011). Due to the structure of ordinary life insurance, it can also be used to save money which will then be paid upon the death of the insured. Generally speaking, an individual can get much higher coverage for the same price through term life insurance (Redja, 2011). So, ordinary life insurance would be a good choice for a young individual who wants a savings aspect with an option to cash in the policy.

            Universal life insurance policies tend to be more flexible than other types of insurance policies. For example, the policy owner can determine the amount and frequency of premiums, except for the first premium (Redja, 2011). These policies allow the owner to withdrawal cash from them and separate the protection and saving components (Redja, 2011). In general, universal life insurance policies would be a better option for individuals with less predictable income streams.

            Variable universal life insurance policies are nearly identical to universal life insurance policies. The few differences are: the policy owner dictates how the premiums are invested and there is no guaranteed minimum interest rate or cash value (Redja, 2011). One significant advantage to these plans is that the interest earned on the investments is not currently taxed. If the policy is held until death, no federal income tax is paid on the earned interest (Redja, 2011). On the other hand, the expenses associated with variable universal life insurance plans are higher which decreases the tax shelter of the universal plans. Variable plans would be best suited for individuals with investment experience that share the same attributes as those listed for the universal plan above.

            References

Decreasing term life insurance. (2015). Retrieved from http://www.mozdex.com/decreasing-term-insurance.php

Rejda, G. E. (2011). Principles of risk management and insurance (11th ed.). Boston, MA: Pearson Prentice Hall.

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Traditional indemnity plans are structured in a way that allows the insured to choose a physician, who was paid for the covered services (Rejda, 2011). One major advantage to this plan is the freedom to choose a physician as well as the more relaxed approach to cost containment (Rejda, 2011).

Managed care plans “provide covered services to the members in a cost-effective manner” (Rejda, 2011). Disadvantages of this are limited choices on physicians and hospitals, and strict cost control (Rejda, 2011). An advantage to this form of health care is focus on preventative care and healthy lifestyles (Rejda, 2011).

After reading the text it sounds like traditional indemnity plans are a good options, but they are widely no longer used (Rejda, 2011). Personally I have a preferred provider organization (PPO) health plan, which was a better fit for my family compared with the health maintenance organization (HMO) option that was available. There is also a third form of a manage care plan, a point-of-service (PSO) plan, which I had never heard of before until reading the chapter. It appears to be another reasonable option because there is still freedom to choose but financial incentives to receive services from within network (Rejda, 2011).

Rejda, George E. (2011) Principles of Risk Management and Insurance 11th edition. Boston, MA. Pearson Education Inc.

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            Traditional indemnity plans are split into two types: basic medical expense insurance and major medical insurance. Basic medical expense plans usually provide hospital and surgical expense insurance, physicians’ visits and other miscellaneous benefits (Redja, 2011). The first two benefits pay for expenses incurred during hospitalization and surgical fees. Hospital expense insurance will likely have a daily maximum limit. Modern plans pay surgeons’ fees as long as they are reasonable or “customary” (Redja, 2011). Finally, these basic plans can include radiation therapy, x-rays, CT scans, and MRI scans.

            The second type of traditional indemnity plan is major medical. Major medical plans are designed to cover most of the covered expenses in the event of a catastrophic illness or injury (Redja, 2011). These plans can be used to supplement basic plans. When used as a supplement to basic medical plans, major medical plans will likely have an out-of-pocket maximum. This puts a limit on how much an individual will have to pay for a stay at a hospital.

            The next type of insurance plan is a managed care plan. Managed care plans are simply “medical expense plans that provide covered services to the members in a cost-effective manner” (Redja, 2011). In these plans, though, there may a limit to which hospitals, specialists, or surgeons that the covered individual can see. Under these plans, cost reduction and quality of the services is closely monitored.

            Traditional indemnity plans are more flexible in terms of which medical service provider than the insured person can see but are likely to be more expensive. Their use has significantly decreased over the last few decades. Managed care plans are more popular now since they are cheaper. The major drawback, though, is that there is a limit to which medical service providers are carried by the plan.

References

Rejda, G. E. (2011). Principles of risk management and insurance (11th ed.). Boston, MA: Pearson Prentice Hall.