How to Create a Farm Transition Plan

As you consider hanging up the boots and retiring, it’s important to have a farm transition plan in place. If you’re planning to retire or simply want to be prepared, consider these steps when starting on a farm transition plan. 

Step 1: Consider Getting Life Insurance

Even if you don’t believe an extensive farm transition plan is necessary, consider purchasing life insurance. According to the 2020 Insurance Barometer study, 40% of people who have life insurance wish they had purchased it earlier in life. 

Life insurance can help your family in the event of the unexpected, leaving them more equipped to take care of themselves. 

Step 2: Define Specific Goals for Your Transition Plan

Begin discussing how to transition assets and property over to the next generation. Also, take some time to evaluate all assets, sources of income and establishing goals. To help, start with thinking about some of these questions:

  • What do my loved ones need to live if I’m not there to support them? (Consider using OKFB’s life insurance calculator to help determine the appropriate amount.) 
  • What passive income sources (rental properties or machinery, cell towers, etc.) do I have that I need to sustain my family through retirement?
  • What stipulations or requirements do I have for the new manager of my property and assets? 

With these questions in mind, start to establish some goals for transitioning over these important assets. 

Step 3: Define Your Successor(s) in Your Farm Transition Plan

One of the most difficult topics to discuss is who will take over your farm or ranch. Choosing the right person to take over the business, finances and additional assets is a monumental and critical task. Additionally, there are many approaches you can take when deciding a successor and how to divide up assets. 

  • With multiple heirs, one approach is to split everything evenly, or determine what is fair and best for each.
  • When considering the division of multiple types of assets i.e., finances, income, the management of property and livestock, etc. — take some time to drop them into a will or other legal document that specifically outlines the details. 

Step 4: Strategically Assemble Your Farm Transition Plan

Now that goals are set, along with who is taking over the finances, responsibilities and the assets, it’s time to think strategically about how to transition these assets. There are many approaches, but the two most common are giving the assets as gifts or transferring them through a will. 

With either approach, consider consulting with legal, tax and insurance professionals. It’s important to understand the potential benefits and drawbacks through transferring assets through either approach.

Planning to transition your life’s work can feel like a daunting task. At Oklahoma Farm Bureau Insurance, our agents are here to help you navigate all the intricacies. Consult with your local OKFB Insurance Agent to help you create a farm transition plan.

Top 5 Farm Insurance Myths

Taking care of your crops, livestocks, upkeep and more is not just your responsibility, it’s your livelihood. Farm Insurance coverage can be stressful to figure out, especially since there are a variety of aspects to consider. Thankfully, with our help, we can ensure your farm or ranch is covered and your mind is at ease. When obtaining coverage or looking to update your current policy, stay aware of these common Farm Insurance myths.

Myth #1: Farm Insurance Offered as a Standard Package

  • We know most farm and ranch operations are unique and have different needs. That’s why Farm Insurance policies are not typically offered as standard packages. There are a variety of policy offerings designed to be customized to your specific needs. 

Myth #2: Crop Insurance Premiums are High 

  • To encourage farmers and ranchers to utilize and obtain crop insurance, it is federally subsidized. This signifies that the government helps cover some of your costs. Also, to increase accessibility for farmers and ranchers joining the industry, there are programs through the USDA’s Risk Management Agency (RMA) that include lower premium subsidies and a waiver against fees.

Myth #3: Disaster Assistance > Crop Insurance

  • Disaster assistance coverage isn’t always clear or outlined and types of crops, losses, etc. could be limiting. Crop insurance provides a guaranteed amount of coverage and gives farmers and ranchers the opportunity to cover different crops and losses.  

Myth #4: Farm or Ranch Vehicles Need Auto Insurance Coverage

  • Auto insurance covers most vehicles. However, trucks, tractors or vans used for farm and ranch operations will likely need farm auto coverage to ensure it is covered for your specific needs. 

Myth #5: Crop Insurance Only Covers Corn or Wheat Growers

  • Federally subsidized crop insurance signifies that it is accessible for more than 500 different types of crops. Additionally, there is no minimum acreage requirement to qualify and it is available nationwide.

Protect your farm and ranch from the unexpected. As you explore Farm & Ranch Insurance policy options, there is a lot to consider. If you have any questions or would like to discuss any of these myths further to get more details, contact us and consult your local OKFB Insurance Agent today.

How to Prepare for a Tornado

As Oklahomans, we live in tornado alley, and as storm season approaches, it’s critical to know how to prepare. Tornadoes can occur suddenly and they can be destructive, so knowing how to prepare and what to do can help you and your loved ones stay safe. As tornado season begins, consider these ways when creating your safety-preparedness plan.

Set and Inform Your Plan

To ensure you and your family are safe, you can create a “what to do if a tornado hits” plan. This plan could include where to take shelter, who is responsible for gathering food and supplies, where to locate the radio and batteries and more. If you’re unsure about the security of your home, you may consider adding a storm shelter. Having your household on the same page can help ensure you react in a timely manner. 

Carl looking at tornado damage done on his farm

Create a Checklist and Store Necessities 

Creating a checklist and storing some basic items can help you stay on track and not forget any critical items. Be sure to include: 

  • Batteries
  • Weather radio
  • Cell phone charger
  • Flashlight
  • Food
  • A fun game or coloring pages to keep the little ones or even yourself entertained

Know the Warning Signs

Luckily, we have the technology and the National Weather Service to warn us if a tornado is developing and headed our way. However, it is always good to know the warning signs if there is a chance of a tornado. 

  • Hail or heavy rain followed by fast and intense winds or followed by eerie quiet and calm 
  • Loud rumbling that could sound like thunder, but is continuous. Some describe it as sounding like a freight train
  • If the sky begins to look dark and green
  • A cloud of debris, even if it doesn’t resemble a funnel
  • A funnel-shaped cloud

“I stepped outside before the tornado actually got there, and I could hear it coming but couldn’t tell how far away it was. Well, of course it went right through, real fast. After it settled down, I peeped outside the window and walked outside, and saw the cars were crushed,” said Billy Gibson, one of our policyholders. Watch how OKFB helped Billy after a tornado hit his home.

Learn the Weather Terms

Two notable terms to know are tornado watch and tornado warning. A tornado watch signifies that the current weather is capable of producing a tornado. While a tornado warning signifies that one has been sighted or seen on a radar. If a tornado warning is issued, you are highly advised to seek shelter. Understanding this difference can help you know what to do. 

As you create plans and checklists, remember to check-in with your OKFB agent to ensure your home and vehicles are protected under your Home Insurance and Auto Insurance policies. You focus on staying safe and prepared, and we’ll worry about protecting your assets. 

Defining Insurance Jargon

Insurance has your back by ensuring your assets are covered, but insurance jargon can often get in the way of you clearly understanding your policy. To help make sense of your insurance policy, here are 10 common insurance terms that could help when both reviewing policies or speaking with your agent.  

Line(s) of Insurance: A class of type of insurance e.g. home insurance, auto insurance, commercial insurance, etc. 

  • Example: Charles has two lines of insurance with OKFB: Auto Insurance and Farm & Ranch Insurance.

Deductible: A specified amount of money that a policyholder must pay before an insurance company will pay a claim. 

  • Example: Esther has to pay a deductible of $300. After she pays her deductible, OKFB will pay the remainder of the claim that is stated in her policy.

Claim: A request or demand for payment from an insurance carrier, as defined in the policy.

  • Example: Carl and Robert filed a claim after a tornado impacted their car and farm. See how Billy and the rest of our team immediately worked to fulfill it here.

Coverage: The extent an item or property is insured in the event of an accident. 

  • Example: Daniel got a full coverage auto insurance policy with OKFB, so he is covered in the event that he is in an accident. 

Umbrella Coverage: Provides higher limits of protection against bodily injury or property damage claims by a third party. 

  • Example: After careful consideration, Anthony decided that umbrella coverage would offer greater protection and peace of mind.

Risk: The chances a loss could potentially occur. 

  • Example: Christie carefully explained the risks associated with lower coverage insurance policies, so I opted for more coverage. 

Policy: The contract between a policyholder and insurance carrier. 

  • Example: Lauren has an auto insurance policy with OKFB Insurance, so OKFB insures her vehicle in the case of an accident.

Premium: Cost an insurer sets for the coverage listed in an insurance policy.  

  • Example: Marco’s premium for his homeowner insurance is $1,200, so he pays $100 every month. 

Quote: An estimate of premium for a specific line of insurance/policy. 

  • Example: Ashley just bought a new home and was looking for the best coverage on Home Insurance, so she used OKFB’s Instant Homeowners Quote to find OKFB’s prices.

Dwelling: A place of residence, e.g. a home, mobile home, etc. 

  • Example: After talking to my agent, I got Dwelling Fire Insurance on my vacation home in Broken Bow. 

Check out our glossary for more common insurance terms. If you have any questions or want further clarification about an insurance term contact your OKFB agent. Also, don’t forget to check in regularly with your agent to ensure your coverage is up to date. We’re here to help you through the unexpected.