Enterprise: Management Job: Using Insurance to reduce risk

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Enterprise ManagementJob Using Insurance to
reduce risk

• Original PowerPoint Created byJoel Wondra
• Modified by Georgia Agricultural Education
  Curriculum OfficeJune, 2002

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Objective

• Learn what insurance is
• and
• determine what insurance you need.

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What is insurance and why is it important to you?
Insurance is a method of managing risk and
uncertainty.
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What are the two reasons to buy life insurance?

• The first reason to buy insurance is to provide
  protection against the loss of income due to the
  premature death of the breadwinner.
• The second reason is to provide a means of
  savings and investment.

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Explain the difference between term, straight,
limited payment and endowment life insurance
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Term

• Term is the purest form of insurance.
• You pay for the insurance and, as long as you are
  paying, you have insurance.

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Straight Life

• (whole) insurer pays a fixed price for insurance
  usually higher at first than term but does
  provide some savings

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Limited Payment

• similar to straight yet payments are higher
• Then the interest earned on the premiums kicks in
  and starts paying the premiums.
• There is even more savings.

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Endowment

• policy in which when you finish paying over a
  number of years you can cash the policy in for
  the face value.
• Costs the most.

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What are the functions of health insurance?

• a. protect against the financial hardship due to
  illness or injury
• b. covers cost of medical care to insure
  competent treatment
• c. protects creditors by insuring policy holders
  ability to repay debt

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What are the four areas that health insurance
covers

1. hospital expense
2. surgical expense
3. Regular
4. major medical

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Hospital Expense

• covers hospital room and board

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Surgical Expense

• pays for all or part of surgical fees

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Regular

• pays for doctors visits

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Major Medical

• provides coverage for large medical expenses

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What does property insurance cover?

• Property insurance insures against loss due to
  fire, hail and wind storms.
• Can get extra coverage for riots, civil
  commotion, vehicles, and smoke.

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Who administers crop insurance and what does it
cover?

• A special division of the USDA administers crop
  insurance.
• This insurance covers crop loss regardless of
  cause and will also cover decreased quality.
• This is a management tool that farmers need to
  consider.

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Types of auto insurance

• a. liability
• b. medical payment
• c. uninsured motorist
• d. collision
• e. comprehensive
• f. add

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Liability

• this insurance pays for bodily injury and damage
  to others when insurer is responsible
  

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Medical Payment

• pays of insured and passengers medical fees
  regardless of blame.

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Uninsured Motorist

• covers insured, spouse and children if struck by
  uninsured

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Collision

• pays damage to insureds care if it hits another
  vehicle or object.

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Comprehensive

• covers loss caused by fire wind, theft,
  vandalism, collision with animal, etc.

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add

• pays a lump sum for death in car accident also
  pays lump sum for loss of limb, blindness, and
  such.

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Insurance companies use the following to figure
premiums

• a. age lt 25
• b. location of vehicle
• c. protection desired
• d. accident history
• e. use of vehicle

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List and explain the two types of insurance
companies.

• stock
• mutual

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Stock

• protects customer and stockholders profit

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Mutual

• policy holders are the owners can profit, but
  might also have to pay extra if losing money

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From who else can we get insurance?

• agricultural organizations
• the government

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Comprehensive personal liability insurance based
on

• number of employees
• type of work

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Workman's compensation benefits

• medical expenses
• hospital service
• pay to the employee.
• This insurance will pay up to 401 weeks and
  provides the spouse with payment for life if
  death occurs.
• This insurance is not mandatory