What is the EV of buying insurance?

derick · #1 10-03-2006, 03:44 PM

What's the EV of buying life insurance?

I mean if it wasn't a bad bet insurance companies would lose money?

What about car insurance? Home insurance? Trip insurance?

Thremp · #2 10-03-2006, 08:53 PM

Life insurance is way overrated.

natedogg · #3 10-03-2006, 09:33 PM

Buying insurance is -EV, that's why they pass laws to force you to buy it.

natedogg

wmspringer · #4 10-03-2006, 10:15 PM

Insurance is generally -EV...but it reduces variance.

Ray Zee · #5 10-03-2006, 10:35 PM

you get about 30 cents on the dollar back unless you are high risk then you get more maybe even have the best of it. insure for only things you have to by law or would ruin your life if it happenned.

Freakin · #6 10-04-2006, 07:03 PM

[ QUOTE ]
you get about 30 cents on the dollar back unless you are high risk then you get more maybe even have the best of it. insure for only things you have to by law or would ruin your life if it happenned.

[/ QUOTE ]

or the lives of those around you.

scrilla · #7 10-04-2006, 07:06 PM

This is on average...insurance companies make money by pooling risk.

As stated earlier if you are high risk in some cases you might be getting the best of it in life insurance but this is almost never the case with car insurace.

Scrilla

SossMan · #8 10-04-2006, 09:52 PM

[ QUOTE ]
Life insurance is way overrated.

[/ QUOTE ]

life insurance is obviously a $ bet w/ my insurance company that I will/won't die in a certain timeframe (talking term only for simplicity). strictly from that perspcetive, of course i'm overpaying and taking the worst of it from a dollar perspective, but I have it anyway because it makes me feel good that my mortgage will be taken care of if I were to die. My fiance wouldn't be able to carry the loan herself and she would probably shack up w/ some prick who would mow my lawn and walk my dogs.

Jdanz · #9 10-05-2006, 06:10 PM

how about health insurance?

just get catastophic, or do economies of scale and negotiated whatever actually make it economical.

dc_publius · #10 10-05-2006, 08:42 PM

Car insurance companies pay out about 60 cents on each dollar they take in. General electronics/upsell warranties pay out about 40 cents for each dollar they bring in. I was reading an article on this today.