This paper analyzes producer welfare and efficiency on premium subsidy method of crop yield insurance using a numerical simulation model. The results are summarized as follows. First, in cases where 50% of the insurance premium is subsidized as it is now, efficiency index goes up when insurance purchase rate of high assurance level decreases and that of low assurance level increases. Second, efficiency indices where the same amount of premium is supported and 50% is supported do not differ if insurance purchase rate by assurance level doesn't change. If the purchase rate of high assurance level decreases and that of low assurance level increases, efficiency index of the cases where the same amount is subsidized is higher. Third, efficiency index with full premium support in cases of products with 50% of assurance level and supporting the same amount of premium on various assurance level is higher than that in cases of 50% of support or the same amount premium support. Fourth, in order to introduce 50% of assurance level, adding budget results in a little lower efficiency than in cases with no budget addition. The results of this paper could contribute to government’s crop insurance policies and subsequent studies, also improving farmers’ welfare.