We propose a new risk-under-climate-change analysis framework for rice production in Malaysia using the lens of index insurance. The framework establishes a yield-index model by correlating and regressing rice yield against hydroclimatic indices derived from historical observations. This allows identification of reliable proxies for production losses for the main and off-seasons of planting based on temperature, precipitation, solar radiation, and river flow. The framework uses future simulations of hydroclimate and rice crop growth, produced by a calibrated watershed model, e.g., the Soil And Water Assessment Tool (SWAT), to analyze the potential impacts of climate change on the yield loss proxies. Bias-corrected climate projections from downscaling experiments such as the Coordinated Regional Downscaling Experiment for Southeast Asia (CORDEX-SEA) Regional Climate Models (RCMs) drive the SWAT simulations. The framework develops risk estimates for the early, mid- and late twenty-first century based on the future probabilities of systematically selected hydroclimatic indices and their associated yield losses. This framework aims to provide a foundation for developing robust insurance contracts for the rice system in Northern Peninsular Malaysia, addressing concerns around design, spatial, temporal, and climate change basis risks.