lik_m_ade
Sweet talking candyman :)
- Joined
- Jul 31, 2006
- Posts
- 3,249
Texguy84 said:It's like, one of the weirdest things to ever pop up in a capitalist society. Basically, these big companies will actually *PAY* to cover your medical expenses, car or property damage, etc., in return for a relatively small fee.
Sadly, you have to pay the fee ahead of time, so you can't just wait till you know you need it, or else it'd be a lot easier to budget for it.
First congrats on finding a truly elegant solution to your HD problem. Much more effective than our proposals.
Regarding insurance, your description is mostly true. Historically it was more of a risk lottery with individuals pooling their monies knowing that they would likely end up paying a little more than the cost of the actual problems they would have(because for most something catastrophic will never happen) but being assured that they would pay much less if they were the one whose calamity number got picked.
With the advent of stable investment markets and actuarial tables, it functions now much more like a casino with the house (the insurer) betting they will make a greater return in the markets and in premiums than they will have to pay out-and like the house they almost always win. The analogy breaks down in that instead of simply heading home broke, like most casino visits, you at least get protection from the peril you insured against (in most cases).
However, like the house, they've also been known to close the table down if they start losing (I had to switch house insurers here 3 times as the companies kept moving out claiming they couldn't make a profit in the region due to high claim payouts and low returns after the tech crash) or tightening up claim allowances.
But overall, it can still be a good thing to have (once again risk vs. return) but not always-I don't carry more life insurance than I have at work as I have no dependants and my assets are enough to pay off my liabilities, give a bit to my sister's kids and hire a brass band for my jazz funeral.
Saves me money and cuts down on assassination attempts.

Nuff said!