Insurance Annie’s Project January 30, 2007 Coweta Oklahoma

What Is Insurance? Protects you and your business from financial risk and losses. Required by law and some lenders to have some types of insurance. Can protect against:  Fire  Theft  Storm Damage  Vandalism

Life Insurance An Important Estate Planning Tool

Life Insurance Can Provide Immediate cash for payments of debts Costs of the last illness Burial expenses Costs of administration Other settlement costs Elimination of the possibility of a forced sale of assets

Life Insurance Can Provide Funds for the surviving partner to buy the partnership interest from the deceased partner’s heirs Enable the business to continue as an on- going enterprise Many, many other situations that Life Insurance can assist

Designation of Beneficiaries A life insurance policy is a legally binding contract which directs the distribution of assets to the beneficiaries. Because family situations change frequently, it might be necessary to change the beneficiaries every so often.

Children as Beneficiaries If the child is a minor, court may appoint someone to manage the funds until the child is of legal age. If parents are not sure if the children are capable of managing the funds directly, assets can be left to a trust for the children.

Types of Life Insurance Term Insurance:  Provides financial protection for a limited, specified period of time.  Does not generate a cash value.  Have a fixed annual payment for the specified period of time. Whole Life:  Provide a death benefit for the entire life of the insured.  Provide a tax-deferred build up of cash values.  Can borrow against the current cash value of the policy.  Have a fixed annual payment for the life of the insured.

Types of Life Insurance Universal Life Insurance  Flexible premium payments  Adjustable death benefit  Most have interest rates that are competitive with other investments  Must look at the administrative costs of the policies. Variable Life Insurance  Death benefits and cash values fluctuate according to the experience of a separate account managed by the life insurance company.  Assume the added benefits and risks of the investment performance.  Must carefully review all policies.

Business Insurance Needs

Common Misunderstanding Home and auto insurance will NOT automatically offer coverage for business- related accidents and losses. People usually find out when it’s too late and discover that their homeowners coverage might be jeopardized.

Would You Be Protected? You’re driving to buy parts. You hit another car, severely damaging both cars and injuring the other driver. A customer trips over a tool left on the floor. A power surge hits your computer and destroys the computer containing your client’s business records. You hire a new employee. The employee is injured requiring hospitalization.

Types of Insurance Essential to Business Insurance on the Structure and Contents Liability Insurance Automobile Insurance Crime Insurance Worker’s Compensation (for employees)

Structure and Contents Insurance Suggestions Might need a extended coverage rider for:  Windstorms  Hail  Smoke  Explosion  Vandalism  Loss of Business Records  Loss of Tools and Inventory

Structure and Contents Insurance Suggestions Additional coverage might be needed for:  Computers  Fax Machine  Cell Phones  Other Special Equipment

Liability Coverage Cover your business and yourself from damage or injury to customers, workers, or property. As the owner and operator, you have more exposure to liability and property loss than when your house was used only as a residence. Verify your current auto and homeowners policy to make sure it covers business pursuits.

Liability Insurance Suggestions See if you current homeowner’s policy can be expanded to cover your business liability. May need to purchase a general liability policy to cover:  Bodily Injury  Personal Property  Damage  Libel and Slander

Vehicle Insurance Suggestions Consider adding a business use endorsement to your personal automobile policy. Vehicle insurance may encompass both physical damage and liability coverage.

Worker’s Compensation All employers are required to provide worker’s compensation insurance for their employees. An employer who has five or fewer employees, all of whom are related by blood or marriage are exempt. With the exception of agricultural employees who are not engaged in operation of motorized machines, all workers employed in agriculture or horticulture must be covered if their employer had a gross annual payroll in the prior calendar year of $100, or more

Determine Your Coverage List the things that might adversely affect you. Contact two or three insurance representatives for an evaluation and cost. Cover your largest loss-exposure first. Avoid duplication in insurance. Take measures to reduce your risk:  Install sprinkler system, burglar alarms, etc.