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Intermediate0.5 hours16 terms

Decreasing Term Insurance: REI Key Terms

Explore this curated collection of key terms related to decreasing term insurance in real estate investment. This reference highlights commonly encountered concepts that might be helpful for investors seeking to understand how this insurance product can protect their real estate assets and debt obligations. It's designed to support your learning, not provide exhaustive coverage.

Term Collection

1

Decreasing Term Life Insurance

Decreasing term life insurance is a type of term life insurance where the death benefit decreases over the policy's term, typically aligning with a declining debt such as a mortgage, while premiums usually remain level.

Intermediate5 min
2

Estate Planning

Estate planning is the process of arranging for the management and disposal of a person's assets, including real estate, during their life and after death, to minimize taxes and ensure wishes are met.

Intermediate15-18 min
3

Mortgage

A mortgage is a loan obtained from a lender to purchase real estate, where the property itself serves as collateral for the debt. Borrowers make regular payments, including principal and interest, over a set period until the loan is fully repaid.

Beginner15-18 min
4

Debt Service Coverage Ratio

The Debt Service Coverage Ratio (DSCR) is a financial metric used in commercial real estate lending to assess a property's ability to generate sufficient Net Operating Income (NOI) to cover its annual mortgage debt payments.

Advanced15-18 min
5

Cash Flow

Cash flow in real estate investing represents the net income generated by a property after all operating expenses and debt service payments have been made. Positive cash flow indicates profitability, while negative cash flow suggests a loss.

Intermediate2-3 min
6

Asset Protection

Asset protection involves legal strategies and structures designed to safeguard an individual's or entity's wealth from potential claims by creditors, lawsuits, and other liabilities, particularly crucial for real estate investors.

Intermediate15-18 min
7

Beneficiary

A beneficiary is an individual, group, or entity designated to receive assets, property, or benefits from a will, trust, life insurance policy, or other legal instrument.

Intermediate14-15 min
8

Policy Premium

A policy premium is the amount of money an individual or entity pays to an insurance company for coverage against specific risks, typically paid regularly (monthly, quarterly, or annually).

Beginner3 min
9

Leverage

Leverage in real estate is the use of borrowed capital, typically through mortgages, to finance property purchases and amplify potential investment returns.

Intermediate15-18 min
10

Term Life Insurance

Term life insurance provides coverage for a specific period, or 'term,' and pays a death benefit to your beneficiaries if you pass away during that time, offering financial protection without a cash value component.

Beginner5-6 min
11

Rental Property

A rental property is real estate purchased with the intent to generate income through tenant rent payments and potential property value appreciation.

Beginner13-14 min
12

Leverage in Real Estate

Leverage in real estate refers to the use of borrowed capital, typically mortgage loans, to finance a property purchase, aiming to amplify potential investment returns on the equity invested.

Intermediate4-6 min
13

Debt Service

Debt service is the total amount of principal and interest payments required to repay a loan over a specific period, typically for a mortgage or other property-related financing.

Beginner11-12 min
14

Death Benefit

A death benefit is the sum of money paid to the designated beneficiary or beneficiaries upon the death of an insured person, typically from a life insurance policy. It provides financial protection to loved ones.

Beginner2-3 min
15

Risk Management

Risk management in real estate is the systematic process of identifying, assessing, and controlling potential threats to an investor's capital and returns, ensuring long-term asset protection and profitability.

Intermediate12-13 min
16

Real Estate Debt Protection

Real estate debt protection refers to various mechanisms and strategies employed by investors and lenders to mitigate the financial risks associated with real estate loans, safeguarding against potential defaults or losses.

Intermediate6 min

Common Questions