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Insurance in ANY form is gambling. Plain and simple. It is a bet that takes places. Just framed in a more flowery language compared to a traditional betting sta

by gifjif 4y ago

Insurance in ANY form is gambling. Plain and simple. It is a bet that takes places. Just framed in a more flowery language compared to a traditional betting statement "If I win you pay me x, if you win I pay X". Insurance company: " Pay me $xxx per month, if something happens to you, we will pay you X" You may benefit i.e your insurance claim is more than the premiums you have paid, or you can loose out by paying more insurance over a time period than the claim. Or simply loose all together where you keep paying and you never get the opportunity to claim. The insurance company operates like a casino, probability is calculated so it always earns more than it looses.

jfengel 4y ago
Insurance is hedging risk. The goal is not to make a profit; the goal is to cut your losses. You don't "win" by dying young and getting an insurance payout. You just lose less than you would without the insurance. If it's a bet, it's a bet you hope to lose. But in a large pool of people, the odds are that one of you will "win". Your descendants recoup the winnings, and the rest of you breathe a sigh of relief that it wasn't you. It's not unreasonable for a company to facilitate that, with a small but reasonable profit. Obviously there is a lot of opportunity for malfeasance and malpractice, simply because there's so much money involved, but the concept itself isn't inherently bad. Neither is a casino, necessarily, but a casino is offering only entertainment. There is no risk to you if you don't play. But in the case of life insurance (and other forms of insurance), you take that risk every day. If you're sufficiently well-off to self-insure, you shouldn't participate, because its offers no benefit. But it offers a genuine tangible benefit to those who cannot afford the risk and seek a hedge against it.
francisofascii 4y ago
Actually, insurance if done properly is the opposite of gambling for the person buying the insurance. You are paying a small fee to not have to gamble.
avgcorrection 4y ago
Insurance is like reverse gambling. The only similarity is that the house always wins in the long run. Unless your definition of gambling is so loose that not buying a lottery ticket is gambling.
giaour 4y ago
> Insurance in ANY form is gambling. Only in the sense that both insurance and gambling charge a fee to alter the variance of a given outcome. But insurance exists to minimize or eliminate variance, whereas gambling seeks to increase it. In this sense, they are opposites.

by gifjif 4y ago

jfengel 4y ago

Insurance is hedging risk. The goal is not to make a profit; the goal is to cut your losses. You don't "win" by dying young and getting an insurance payout. You just lose less than you would without the insurance. If it's a bet, it's a bet you hope to lose. But in a large pool of people, the odds are that one of you will "win". Your descendants recoup the winnings, and the rest of you breathe a sigh of relief that it wasn't you. It's not unreasonable for a company to facilitate that, with a small but reasonable profit. Obviously there is a lot of opportunity for malfeasance and malpractice, simply because there's so much money involved, but the concept itself isn't inherently bad. Neither is a casino, necessarily, but a casino is offering only entertainment. There is no risk to you if you don't play. But in the case of life insurance (and other forms of insurance), you take that risk every day. If you're sufficiently well-off to self-insure, you shouldn't participate, because its offers no benefit. But it offers a genuine tangible benefit to those who cannot afford the risk and seek a hedge against it.

francisofascii 4y ago

Actually, insurance if done properly is the opposite of gambling for the person buying the insurance. You are paying a small fee to not have to gamble.

avgcorrection 4y ago

Insurance is like reverse gambling. The only similarity is that the house always wins in the long run. Unless your definition of gambling is so loose that not buying a lottery ticket is gambling.

giaour 4y ago

> Insurance in ANY form is gambling. Only in the sense that both insurance and gambling charge a fee to alter the variance of a given outcome. But insurance exists to minimize or eliminate variance, whereas gambling seeks to increase it. In this sense, they are opposites.