Report: Insurance Types, Retirement, and Estate Planning Overview

This report delves into the realm of personal risk management, focusing on insurance, retirement, and estate planning. It begins by defining insurance and its significance, differentiating between general and life insurance, and highlighting their respective features. The report then emphasizes the importance of retirement and estate planning, outlining key considerations such as health, housing needs, and life expectancy. It provides a step-by-step guide on estimating retirement savings, including calculating retirement expenses, income from guaranteed sources, the savings gap, and considering various life scenarios. The report concludes by underscoring the importance of insurance as a saving plan and a means of financial protection against unforeseen events. The report is a valuable resource for students seeking to understand financial planning and risk management strategies.

RUNNING HEAD: TYPES OF INSUARANCE 1
UNIVERSITY NAME
STUDENT NAME
STUDENT ID
COURSE
DATE

TYPES OF INSUARANCE 2
EXECUTUVE SUMMARY
The purpose of this report is to discuss the types of insurance and their key charactersistics.it also
highlight the importance of insurance and how to estimate the amount to be saved for retirement
scheme.

TYPES OF INSUARANCE 3
Table of Contents
INTRODUCTION...........................................................................................................................4
IMPORTANCE OF INSURANCE.................................................................................................4
TYPES OF INSURANCE...............................................................................................................4
LIFE INSURANCE.........................................................................................................................4
FEATURES OF LIFE INSUARANCE...........................................................................................4
GENERAL INSURANCE...............................................................................................................4
FEATURES OF GENERAL INSUARANCE.................................................................................4
IMPORTANCE OF RETIREMENT AND ESTATE PLANNING................................................5
HOW TO ESTIMATE THE AMOUNT TO SAVE FOR RETIREMENT...................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

TYPES OF INSUARANCE 4
INTRODUCTION.
Insurance is a type of contract under which the insured transfers the risks of a possibility of risk
occurrence to the insurer through payment of insurance premiums so that he can be compensated
in the event of an eventuality.
IMPORTANCE OF INSURANCE
1. Contributes to economic growths insurance companies creates job opportunities to individuals
in a country improving their living standards hence facilitating economic growth of a country.
2. Can be used as a saving plan, insurance contracts mainly life insurance policies are use as
investments by the holders who make payments of regular premiums and later claim them
TYPES OF INSURANCE
i. General insurance.
ii. Life insurance.
LIFE INSURANCE
is a contract that offers financial Compensation to the beneficiaries in case of death of the
insured (Dragos, 2014).
FEATURES OF LIFE INSUARANCE
1. has a surrender value- this is the amount the policy holder gets if he terminates the insurance
contract before maturity.
2.Covers life exclusively, life insurance concerns issues that affect life only i.e. health insurance.
GENERAL INSURANCE
Covers the risk associated with tangible asset against the possible loss occurrence (Parodi, 2014).
FEATURES OF GENERAL INSUARANCE
1. It is a contract of indemnity; the aim of the general insurance policy is to restore the insured to
HIS initial financial position.

TYPES OF INSUARANCE 5
2. Has no surrendered value, if the policy holder of the general insurance policy terminates the
contract before maturity he /she is not entitled to compensation.
IMPORTANCE OF RETIREMENT AND ESTATE PLANNING
1. Heath reasons- the increasing cost of meeting health needs is of concern to those going on
retire as they seek to increase their life expectancy.
2. Housing needs, this involves saving enough that will guarantee a retiree access to a better
living conditions which includes owning, constructing or renting a decent house (McCullough,
2012).
ESTIMATING THE AMOUNT TO SAVE FOR RETIREMENT
Estimated in the following four steps;
1. Estimating retirement expenses
This involves computing the amount you perceive you will consume on the entire retirement
period including payable tax estimation on retirement income (Hanna, Kim & Chen, 2016).
2. Compute the income amount from guaranteed sources.
This includes estimations from the sources such as pensions, social security and monthly
annuity. If the guaranteed income is more, the savings needed will be less. The income is then
related to the approximated retirement expenses
3. Compute the GAP.
This involves calculation of the gap between retirement expenses and the guaranteed sources of
income. The gap indicates yearly amount sourced from own savings and investments. You will
then sum up every year gap over the anticipated retirement period to establish an approximation
of the amount required to be saved for retirement.
4. Consider situation and life expectancy.
To overcome this, develop a worst and best case scenario. The best scenario assumes average
and above average rate of returns on investment, average life expectancy and low inflation. The
worst assumes below average returns, above average life expectancy and high inflation.

TYPES OF INSUARANCE 6
CONCLUSION
In conclusion, insurance is important to an individual as it can be used as a saving plan and to be
compensated in the event of an eventuality.

TYPES OF INSUARANCE 7
REFERENCES.
Dragos, S. L. (2014). Life and non-life insurance demand: the different effects of influence
factors in emerging countries from Europe and Asia. Economic research-Ekonomska
istraživanja, 27(1), 169-180.
Hanna, S. D., Kim, K. T., & Chen, S. C. C. (2016). Retirement savings. In Handbook of
consumer finance research (pp. 33-43). Springer, Cham.
McCullough, J. B. (2012). The influence of positive psychological factors on small business
owners' retirement planning activities. Financial Services Review, 21(1), 1.
Parodi, P. (2014). Pricing in general insurance. Chapman and Hall/CRC.