2. Checkpoint Answer Key: What is Weather Index Insurance?
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
