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With projections of more severe and more frequent extreme weather, farmers’ vulnerability to weather shocks such as drought will remain central to global poverty concerns and policy debates for decades. Drought-tolerant crop varieties have attracted widespread attention. Index insurance has garnered similar enthusiasm. In many settings, neither drought tolerance nor index insurance in isolation will be sufficient; the full potential of either might be tapped only when bundled with the other. Drought-tolerant crops may protect against moderate drought only, leaving farmers exposed to extreme drought. Drought index insurance can provide a more complete protection, but farmers may be unwilling to pay its premium. Proper bundling of the two innovations may help resolve this conundrum by leveraging complementarities between them. This chapter calibrates such a bundled drought tolerance–drought index …