A Topical Overview Of Programs Of Universal Life Insurance

Some producers tend to overlook crop insurance as an important risk management tool, since the available revenue guarantees are lower than the cost of production in many situations. However, the overall financial risk in 2017 may be far greater than it was in back or 2013, when overall crop revenues were much higher. Crop insurance premiums for 85% RP coverage for corn and soybeans in many areas are much more favorable now than they were in previous years. Some producers have been able to increase their APH corn and soybean yields in recent years by using the trend-adjusted yield (TA-APH) yield endorsement for their crop insurance coverage. This has helped expand the insurance guarantee with only a minimal premium cost increase. In the 2016 crop year, many farm operators in South Central and Southwest Minnesota saw the benefits of having 80% or 85% RP crop insurance coverage for corn and soybeans. Some portions of this region received record rainfall during the 2016 growing season, and were impacted by severe storms with excessive rainfall events and hail, causing significant crop loss. In addition, the 2016 corn price dropped from a RP price guarantee of $3.86 per bushel in February to a harvest price $3.49 per bushel in October. This resulted for some substantial crop insurance indemnity payments for producers that incurred significant yield losses on corn in 2016, and had 80% or 85% RP crop insurance coverage in 2016. Producers with lower levels of coverage received very minimal 2016 indemnity payments.

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