Insurance is a Form of Betting

Alternate title: Insurance is the work of the devil, especially health insurance.

I've tried for years to explain this to people and I am routinely told I'm WRONG, insurance is not betting. Sometimes by people IN insurance trying to insist -- like the Mafia -- "We are legitimate business men."

Comment by me:
Insurances are not bets

Origin story for Lloyd's of London:

The patrons bet, for example, on whether Admiral John Byng would be shot for his incompetence in a naval battle with the French. He was.

The gentlemen of Lloyd's would have had no qualms about taking my bet on my own life.

Edward Lloyd realised his customers were as thirsty for information to fuel their bets as they were for coffee, and began to assemble a network of informants and a newsletter full of information about foreign ports, tides, and the comings and goings of ships.

His newsletter became known as Lloyd's List.

Lloyd's coffee house hosted ship auctions, and gatherings of sea captains who would share stories.

If someone wished to insure a ship, that could be done too: a contract would be drawn up, and the insurer would sign his name underneath - hence the term "underwriter". It became hard to say quite where coffee-house gambling ended and formal insurance began.




No, that isn't why. I worked in insurance. Not homeowners insurance, but I had a certificate and processed claims.
The reason is that most human settlements occur in flood plains because we cannot live without water. We drink it. We bath in it. We irrigate crops with it. Flood plains have fertile soil. We use rivers and oceans for essential cargo transit.

Insurance is about risk management. It is a form of betting. And there is no bet here because there is no question of if it will flood. The question is only when will it flood?

That's a fool's bet to say "I will pay you X amount of money if it floods" when it is guaranteed to flood sooner or later. That amounts to charity, not insurance.
That's another comment by me on Hacker News and someone who was probably male promptly shot it down. And explained that like me, he's also in insurance and has a spiffier title than entry level loser. 

He's an ACTUARY -- the mathier than me people making the calculations for what bets his company will cover.

Currently, data from wearables is upending health insurance because the flood of data is rapidly changing the bets involved. 

If you think you need life insurance, please let me recommend you use that money to invest in:

1. A prepaid funeral.
2. A nest egg that your children can inherit if you don't spend it all before you die.

Proviso: Please don't cancel term life if you have minor dependents based on a blog post. Term insurance calculated properly is intended to make sure it's not a survival issue for your family if you die. TALK to someone before making such a decision.

If you need car insurance to be in compliance with the law, ask around. Some US states don't actually require car insurance. If you can cover a bond of X thousands of dollars in case you hit someone, you may be able to drop your car insurance.

The US really needs to pull its head out of its butt and provide health coverage for all citizens by the government like some civilized countries do.

Obamacare probably broke the US health insurance industry because it says they can't deny for pre-existing conditions and that means the health insurance industry can no longer sit down with an actuary and under the polite euphemism of cost pooling calculate what bets they are willing to take on.

Like a Las Vegas casino, an insurance company designs the machines and the bets so the house wins most of the time. It's a little more complicated than that because insurance companies invest part of the money you give them to help cover things.

But to have a casino or insurance company at ALL, you have to take in more money than you pay out. You have employees to pay and other overhead expenses that must be covered to keep the doors open at ALL.

I started a comic while I worked for Aflac for five years. I killed it for fear I would get fired over talking trash about the company. 

In addition to being in poor health and a generally foul mood, I felt I was working for the devil and hated every minute of that job.

And I worked at a company with an excellent reputation that trains people to look for a reason to pay the claim. Some companies train people to look for a reason to deny the claim.

To this day, I'm willing to tell you if you NEED insurance, see if Aflac has a product that works for you. Because they suck less than most insurance companies.

The best thing about working in insurance is when my son said to me "The universe is laughing at you. And it's not even being cruel." 

If you THINK you need insurance, I encourage you to look for some other solution. 

Life insurance is a bet on a person's life and has been misused to profit off of murdering people. When I was newly divorced and had a modest amount of life insurance and was struggling to make ends meet, I felt like "I'm worth more DEAD than ALIVE."

My kids encouraged me to cancel it because every dollar counted and they were tired of hearing that from me. Canceling it enormously improved my mental health.

This post won't make a difference in the world or to so much as one person. No one ever took me seriously about this while I worked in insurance and had a much larger audience because I was commenting on Hacker News.

I'm currently homeless and dirt poor. In the US, that's another reason to assume I'm incompetent and don't know what I'm talking about.

Assholes like Donald Trump love it when morons equate net worth with credibility and bullshit like that. But since I have no audience and blogging is essentially making me no money, I'm finally free to speak my mind as I see fit and not worried I'll be cancelled.

I've already been cancelled. I'm just waiting to expire.


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