Yes that's true the average payout rate is 60% IIRC. But due to the diminishing marginal utility of money, it may make economic sense to buy insurance against r

Yes that's true the average payout rate is 60% IIRC. But due to the diminishing marginal utility of money, it may make economic sense to buy insurance against risks that would ruin you. But buying insurance for small stuff, you're just donating money to insurance companies. The biggest scam is 'insurance' for eyeglasses. It's a fixed, predictable cost for most people. Eyeglass frames are ridiculously overpriced, the market is practically a monopoly ran by Luxottica. Insurance companies and Luxottica manage to get people to pay $600-700 for a pair of glasses (300$ for frame, $150 for lenses, x1.5 because low insurance payout rates) by hiding the cost in monthly premiums. No one would pay that much upfront.