Personal Finance Assignment: Healthcare, Investment, and Mutual Funds

This assignment delves into crucial aspects of personal finance, addressing healthcare insurance, investment strategies, and mutual funds. Part A examines the key steps for evaluating and choosing health care insurance options, emphasizing cost analysis and benefit comparison, and also discusses key considerations for private health insurance. Part B explores how investment decisions in the stock market affect financial planning, liquidity management, financing, and wealth protection, highlighting the importance of financial analysis and risk management. Part C focuses on mutual funds, discussing the cost structures, risk profiles, and other critical issues that retail investors should consider before investing. The assignment offers a comprehensive analysis, supported by relevant references, to provide a clear understanding of financial decision-making.

Running head: PERSONAL FINANCE
Personal Finance
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Part A...............................................................................................................................................2
Part B...............................................................................................................................................3
Part C...............................................................................................................................................4
References........................................................................................................................................5

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Part A
1) The two key steps that should be well selected for the purpose of selecting a Health Care
Insurance Options are primarily in the field of costs that are charged and the benefits that each of
insurance company tend s to provide with respect to another (Individuals & Families, 2020).
Insurance Premiums: The insurance premiums are the key factors which determines the
amount that an insurer asks or insured person for well covering his health expenses if the health
situation of the insured gets deteriorated. If the insurance premium prices are too varied or are
too high then this would be significantly influencing our decisions for the purpose of well
selecting an appropriate insurance (Private Health Insurance Site, 2020).
Percentage of Claim Accepted and Benefits: Different Health Company have their different set
of benefits and terms in the field of health related benefits that the company provides and these
are primarily in the field of coverage of existing health disease, benefits and hospitalization
benefits that are provided, cash less services, wider coverage or tie up of insurance companies
with the hospital chains are some of the other key steps that should be analysed while selecting a
Health-Care Insurance Option (Marketplace, 2020). Other key factors like the percentage of
claims accepted and well acknowledged are some of the key measure with which we can
evaluate the effectiveness of the insurance product offered.
2) The private health care operating insurance companies well undertakes a lot of considerations
before one party can fully acquire his/her benefits. Now after well considering the cost,
limitations that the coverage intended is offered and also whether, it would be well meeting the
needs that are being intended, which would further be well helping in deciding whether it would

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be the best coverage or not to select. In an addition to the mentioned or discussed point, it also
gives a person a clear review in terms of the costs charged are feasible or not when compared to
other insurance companies who also tend to provide such beneficial services (Glover, 2020).
Part B
Investment in a traditional asset class like stock is usually considered by most of the
investors who are well expecting to earn a stable and consistent return from the market. However
there may be few factors that would be well affected while one invests in stock market and these
are as follows:
 Financial Planning: A proper financial planning needs to be done based on the stocks
that needs to be selected, its business, financial, industrial and economic analysis needs to
be well carried so that a detailed financial analysis can help us know better about the
stock.
 Liquidity Management: In terms of managing liquidity, the investor should be having a
long-term approach when considering for investing into stocks as investors would not be
able to fund his liquidity needs from the cash invested into stocks because of the long
time-period of investment and uncertainty of cash flows (Understanding Liquidity Risk
and Your Investments, 2020).
 Financing: The financing amount would be required by an investor if well goes for
purchasing the stock on a cash basis as it requires a significant amount of cash flows
investment and the same can be of a prime concern. While on other hand, if the
investments are done or stocks are used on a margin basis the financing would not be of
much concern to the investor’s.

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 Wealth Protection: Protection of wealth can also be done better with the help of the
derivatives instruments which acts as a key tool for the purpose of hedging and managing
the risk that is associated with stocks investments. It is important that investments done
well not only achieves a sound growth but also, undergoes a capital protection or wealth
protection so that investors are not widely affected.
Part C
Mutual Funds are widely considered by retail investors as the best investment tool and
the process for the purpose of investment. Mutual Funds are generally selected by retail investors
for the purpose of investments as this acts as a key tool for the purpose of investment, whereby
investors don’t have to research on stocks, assets class or review the changes that occurs on a
daily basis. However, there are two key issues for investments into stocks and mutual funds and
these are as follows:
 Costs Structure: The cost structure for the mutual fund is of prime concern and is of
key concern for the investors as the management fees that are charged by the fund
managers for well managing the funds. Higher fixed costs that are incurred in the form
of management fees generally erode the gains that are earned by the fund managers on
the amount invested.
 Investor’s Risk Profile: The class of assets or stocks that are selected by the fund
manager is well selected on the basis of his or her perception towards the stocks and
does not take the consideration of investors risk and return objective which in turn
sometimes make the fund sometimes unaligned with the investor’s goals and objectives.

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Investors who are well categorized as risk averse may not be well able to get the
benefits of investing into mutual funds.

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References
E-Health is America’s #1 Private Health Insurance Site. (2020). Retrieved 9 April 2020, from
https://www.ehealthinsurance.com/
Get 2020 health coverage. Health Insurance Marketplace. (2020). Retrieved 9 April 2020, from
https://www.healthcare.gov/
Glover, L. (2020). Your Step-by-Step Guide to Choosing a Health Insurance Plan - NerdWallet.
Retrieved 9 April 2020, from https://www.nerdwallet.com/blog/health/health-insurance-
guide/
Individuals & Families. (2020). Retrieved 9 April 2020, from https://www.bcbs.com/individuals-
families
Understanding Liquidity Risk and Your Investments. (2020). Retrieved 9 April 2020, from
https://www.thebalance.com/liquidity-risk-101-357229