Checkpoint Answer Key: What is Weather Index Insurance?
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**Answers**

*Example:* By purchasing weather index insurance, any kind of damage to or loss of my crops will be covered. **False** *By purchasing weather index insurance, only the terms agreed to in the contract will be covered.*

#. To obtain insurance, one must agree to and sign a contract with an insurance company. **True**

#. If the terms of the insurance contract are fulfilled and the specific loss covered does occur, I will receive a pre-agreed upon payment. **True**

#. If there is a bad rainfall year, but this low level of rainfall does not fall within the agreed upon contract dates, I will still receive a payout. **False** *If there is a bad rainfall year, but this low level of rainfall does not fall within the agreed upon contract dates, I will NOT receive a payout.*

#. The exact terms of a contract must be met for a payout to occur. **True**

#. Insurance can help cover all of my risks and alone act as my disaster management tool. **False** *Insurance cannot help cover all of my risks and works best when it is combined with other development and disaster management strategies. Index insurance is not a stand-alone solution, but one tool of many.*


#. With this type of index insurance, I will receive a payment in most years. **False** *With this type of index insurance, I will not receive a payment in most years.*


#. I will not receive a payment in all bad years. Farmers will still experience bad years that are not fully covered, or covered at all by their insurance contracts. **True**


#. Typically, insurance needs to be repurchased each year and only covers one year at a time. Your commitment is only for the one year. **True**