Policies Revenue Protection (RP) Yield Protection (YP) Group Risk Income Protection (GRIP) Group Risk Protection (GRP)

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1 Policies Revenue Protection (RP) Yield Protection (YP) Group Risk Income Protection (GRIP) Group Risk Protection (GRP) RP What is Revenue Protection? A Revenue Protection (RP) policy protects a policyholder s income when the crop insurance revenue falls below the guaranteed crop insurance revenue. It provides coverage to protect against loss of revenue caused by low prices, low yields or a combination of both. How does RP work? Revenue Protection (RP) uses futures market prices and your approved APH (Actual Production History) yields to compute your crop insurance revenue guarantee. The projected price for each crop is determined by the Commodity Exchange Price Provisions. In the central US, for example the Corn Projected Price is established during February using the average of the daily closes for December corn futures on the CME. Central US Soybeans use the CME November futures contract. The minimum crop insurance revenue guarantee on an RP policy is computed by multiplying the projected price by the APH yield for your unit, by your chosen coverage level (50 to 85 percent). Your actual crop insurance revenue is computed by multiplying your actual yield by the crop insurance harvest price. You become eligible for an indemnity payment when your actual crop insurance revenue falls below your minimum or revised crop insurance revenue guarantee. The payment is equal to the difference. The RP policy always pays a claim if your actual yield falls below your yield guarantee. Your yield guarantee is computed by multiplying your APH yield for your unit, by your chosen coverage level (50 to 85 percent). RP provides a Minimum Crop Insurance Revenue Guarantee that can increase as much as 200% over the minimum guarantee if the crop insurance harvest price is higher than the projected price. This benefit gives producers peace of mind to hedge or forward contract guaranteed bushels knowing that they will get what they hedged or forward contracted their crops for plus an indemnity payment to cover financial obligations to their brokerage account or grain buyer should they have a production shortfall. You can elect to purchase RP insurance with a Harvest Price Exclusion (HPE). If you choose this option your minimum crop insurance revenue guarantee will not be recalculated should the harvest price end up being higher than the projected price. Therefore you have no crop insurance protection against price increases that create financial obligations from guaranteed bushels hedged or forward contracted. Please note that local basis is NOT considered in the calculation of the crop insurance revenue guarantee or actual crop insurance revenue. Projected Price* Corn - Average closing price of December Futures Contract of the Chicago Board of Trade (CME) during the month of February. Beans - Average closing price of November Futures Contract of the CME during the month of February. Wheat - Commodity Exchange, Futures contract and average period vary by variety by state. See your agent for details. Harvest Price* Corn - Average closing price of December Futures Contract of the CBOT during the month of October. Beans - Average closing price of November Futures Contract of the CBOT during the month of October. Wheat - Harvest price average period varies by variety by state. See your agent for details. Harvest Price is limited to 200% of the Projected Price. Crop Insurance Actual Revenue Actual Harvested Yield X Harvest Price. Local basis is not considered. APH (Actual Production History) The yield information for previous years, including planted acreage and harvested production, used to determine your yield for insurance purposes. Level of Coverage 50% to 85% in 5% increments. (Some coverage levels are not available in all counties) *Not that projected and harvest price examples are for Central US Corn and Beans, check with your agent for your specific state.

2 YP What is Yield Protection Crop Insurance? A Yield Protection Crop Insurance (YP) policy, protects a policyholder against a loss in yield. A payment will be made when the actual yield falls below the yield guarantee, which is based on the insured s share of the approved actual production history on the unit covered. How does YP work? To find your yield guarantee, you multiply your APH by the level of coverage you choose. If your actual harvested yield falls below your yield guarantee on the unit, you are eligible for an indemnity. This indemnity is paid at a level equal to your yield loss per acre multiplied by the Projected Price that is established by the average futures closing price for the harvest month during the projected price averaging period or by the USDA s Risk Management Agency for crops not traded on a futures exchange. Projected Price Corn - Average closing price of December Futures Contract of the Chicago Board of Trade (CME) during the month of February. Beans - Average closing price of November Futures Contract of the CME during the month of February. Wheat - Commodity Exchange, Futures contract and average period vary by variety by state. See your agent for details. Units Optional, Basic, or Enterprise units are available in most areas. Level of Coverage 50% to 85% in 5% increments. (Some coverage levels are not available in all counties.) What types of yield loss are covered by YP? The YP policy covers unavoidable production losses such as drought, excessive moisture, hail, wind, frost/ freeze, tornado, lightning, flood, insect infestation, plant disease, excessive temperature during pollination, wildlife damage, and certain other causes. (Refer to the policy for clarification.) YP does not cover losses resulting from poor farming practices, low commodity prices, vandalism or theft. Late Planting Coverage Late planting coverage is included as an automatic feature in most YP policies. With most crops, there is a 20 to 25 day late planting period. It starts on the Last Planting Date (These dates vary by region - See the policy for details.) The production guarantee is reduced 1 percent per day until the end of the Late Planting Period for a maximum reduction of 25 percent. If unable to plant until after the late planting period due to an insurable cause of loss, the insured crops will be covered at 60% of the original production guarantee for timely planted acreage. Prevented Planting Coverage Prevented Planting (PP) coverage is also included as an automatic feature in most YP policies. If you are prevented from planting a crop due to an insurable cause of loss, PP provides coverage equal to 60% (or other level elected up to 70% in 5% increments) of the original yield coverage. There are limitations in regards to any second crop being planted on the PP acres. (Other crops can be planted for harvest on these acres after the late planting period of the first insured crop.) Prevented planting provisions require at least 20 acres (or 20% of the acreage intended to be planted in the unit, whichever is less) to be affected. Replant Payment If an insured crop is severely damaged for a reason due to an insured peril and will not produce at least 90% of the guaranteed yield, insured can receive a replanting payment. The maximum replant coverage is equal to 20% of your share of the guaranteed yield (up to 8 bushels for corn and 3 bushels for soybeans) multiplied by the price election chosen in the policy. The replant payment is not available for catastrophic

3 level coverage. *Note: No claim can be paid until there is an approved schedule of insurance which requires producer to turn in a complete and timely dated acreage report. All indemnity payments (except Replant Payments)by RMA rules, must be deducted from any outstanding premium due on federal crop insurance policies before a check can be prepared for the insured. All claims over $100,000 per crop require a three year audit of the insured s actual production history. GRIP What is Group Risk Income Protection? A Group Risk Income Protection (GRIP) policy is a county-based insurance product that pays the policyholder in the event the actual county revenue falls below the county trigger revenue selected by the policyholder. How does GRIP work? Policyholders are eligible for a payment when the actual county revenue drops below the county trigger revenue that they choose. The trigger revenue is calculated by multiplying the Base Price by the expected county yield, then multiplying this by the level of coverage (90, 85, 80, 75, or 70 percent). Please note that local basis is NOT considered in the calculation of the trigger revenue or actual revenue. The Base Price is the average futures closing prices during the month of February. For corn, the December futures contract prices are used, while soybeans use the November futures contract prices. The actual county revenue is computed by multiplying the actual county yield by the harvest price. The harvest price for soybeans is the average of the November futures contract price during October while for corn, it is the average of the December futures contract price during October. Harvest price is limited to 2 times the Base Price. The amount of payment the policyholder receives depends on the level of protection selected. A policyholder can choose a level from % of the maximum available protection. A policyholder can elect to purchase GRIP insurance with the Harvest Option (HO) where the revenue guarantee does increase if the harvest price is higher than the February price. Special Notes on GRIP GRIP does not cover replant, late planting, prevented planting, or loss specific to the policyholder s unit. GRIP is strictly a county policy, and a loss is determined based upon county yield only. Indemnity payments are based off of the actual county yields, therefore they are paid in the spring of the following year. Should I buy supplemental insurance along with the GRIP policy? A policyholder who purchases GRIP insurance may want to supplement it with private hail or fire insurance, to guard against isolated occurrences that could damage their own crops without substantially lowering county yields. Unlike crop insurance products based on the policyholder s actual production history, there is no reduction in the GRIP premium when supplemental coverage is purchased. Expected County Yield Set each crop year by the National Agricultural Statistic Service (NASS). Based on planted, harvested and unharvested acres, in addition to yield trends. Base Price Average of futures closing prices during the month of February. For corn, the December futures contract prices are used, while the November futures are used for soybeans. Trigger Revenue

4 GRIP price multiplied by the expected county yield, then multiplying this by the level of coverage (70-90 percent). Local basis is not considered. Maximum Protection per Acre GRIP Price multiplied by Expected County Yield, by a 1.5% factor. A policyholder can choose coverage from 60% to 100% of this maximum protection. Actual County Revenue Actual County Yield X Harvest Price. Actual County Yield Determined by the National Agricultural Statistical Service (NASS) in March of the year following harvest. Level of Coverage (Trigger Revenue) 70% to 90% of Expected County Yield in 5% increments. (Some coverage levels are not available in all counties.) GRP What is Group Risk Protection? A Group Risk Protection (GRP) policy is a countybased insurance product that pays the policyholder in the event the actual county yield falls below the trigger yield selected by the policyholder. How Does GRP Work? To find the trigger yield for GRP, a policyholder picks a level of 90, 85, 80, 75, or 70 percent of the expected county yield. This expected county yield is set at the beginning of each crop year by the USDA s Risk Management Agency (RMA) and is based on the county s yield history since GRP pays an indemnity when the actual county yield is below the county trigger yield. County yields are determined by the National Agricultural Statistical Service (NASS), a branch of the U.S. Department of Agriculture. NASS releases county yields in March of the year following harvest. The amount of payment the policyholder receives depends on the level of protection selected when the unit is enrolled in GRP. The policyholder can choose a level from % of the maximum available protection. That maximum available protection is set each year by the Risk Management Agency (RMA). Special Notes on GRP GRP does not cover replant, late planting, prevented planting, or loss specific to the policyholder s unit. GRP is strictly a county policy, and a loss is determined based upon county yield only. Indemnity payments are based off of the actual county yields, therefore they are paid in the spring of the following year. Should I buy supplemental insurance along with the GRP policy? A policyholder who purchases GRP insurance may want to supplement it with private hail or fire insurance, to guard against isolated occurrences that could damage their own crops without substantially lowering county yields. Unlike crop insurance products based on the policyholder s actual production history, there is no reduction in the GRP premium when supplemental coverage is purchased. Expected County Yield Set each crop year by the National Agricultural Statistic Service (NASS). Based on planted, harvested and unharvested acres, in addition to yield trends. Maximum Protection per Acre A set dollar amount of coverage that is set by the Federal Crop Insurance Corporation (FCIC). A

5 policyholder can choose coverage from 60% to 100% of this maximum protection. Level of Coverage (Trigger Revenue) 70% to 90% of Expected County Yield in 5% increments. (Some coverage levels are not available in all counties.) To report fraud call: Diversified Crop Insurance Services: (217) James Thompson Inspector's General Hotline: (800)