We’re all Gamblers…

…on some level or the other. I was driving in to work today and just randomly started thinking about what insurance truly is.

Insurance is a bet, placed by you, that you will get sick. You are literally putting money down, against yourself, that you don't think you can be well for the rest of your life. Honestly, it is probably a good bet really. Most people don't go their whole life without having to go to the doctor for something, but still it seems a little pessimistic doesn't it? It is also kinda sad how often when lose the bet.

Each month (or every six monthes, whatever) I put $100+ down saying that I think I will wreck my car. If I do wreck my car the bet pays off and I get back whatever the cost of the wreck is. If I don't wreck my car, the takes the money and I am no better off. The game starts over and I pony up some more cash. Whats even worse that going to Vegas is, that if it goes down that I win, the house then makes me bet more each hand, in order to stay in the game. The more times I collect on the bet the more I have to pay to play the game every month.

Health insurance is the same way. Place your bet every month, hope that you lose your money, because that means that you didn't get sick.

Life insurance is off the charts on the “torques your mind scale”, because basically you are putting money down that you can't ever win with. If you win the bet you are dead, if you lose the bet you are out the cash.

Think about it in another way even. If I pay $1200+ car insurance a year and I never wreck my car, in around 12-15 years I could just buy a with the money that I have paid the insurance company.

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3 Responses to We’re all Gamblers…

  1. noneofus says:

    Granted, it wouldn’t take long to ‘save’ enough to pay for your own vehicle.

    The reason most pay insurance is the catastophic collision where you kill someone or physically handicap them. You could spend your whole life paying for that kind of damage. Heck, even with insurance, you still might, most policies have $100k limit on medical payments anyway.

    Life insurance is such a ‘bad gamble’, the IRS doesn’t make beneficiaries pay taxes on the money.

  2. maxx says:

    I think insurance is a safety net more than a gamble.

    For example, your car has airbags. If you use your logic from above, then the very existence of those airbags implies that you are gambling that you will get into a wreck every time you get behind the wheel. Which is not what they are there for at all.

    And life insurance isn’t intended for the person who takes out the policy. Lets say you have a family with a young child, you’re the only source of cash- and you have a certain middle class standard of living. You have an aneuryism and kick the bucket at 38. Essentially, your surviving family is stuck with trying to maintain that same standard of living without the benefit of you being around anymore. Life insurance is just an airbag for that situation – it creates a financial cushion so that your family can get back on its feet and recover from your untimely demise.

    I don’t think insurance is a gamble at all – I think it is a neccessity in any modern society.

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