Why is it apparently cool and fine for insurance companies to spend countless billions, trillions of our money constantly buying ad time?
It's not your money, it's their money.
this post was submitted on 27 Nov 2023
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It stopped being your money when you gave it to them. It became their money, and they get to spend it how they want, with some caveats.
For an insurance company to exist it has to spend less covering claims than it collects in payments.
Otherwise they end up bankrupt.
Even if you got back every dollar you spent on insurance, there would be nothing left over to spend on staff or any other part of their business.
This means anyone with insurance is better off taking their payments and saving it for when they need something covered.
Insurance is a scam.
Insurance companies, specially life, usually have claim ratios (claims/premiums) of over 100% without problems, because they earn more money on investing the premiums over time that on the premiums itself.
I’ve worked as a claims adjuster. It was my job to find ways to deny claims so that my employer could make more profit. My employer was very clear about that.
Even if the insurance company is profitable, they will always want more.
Publicly traded insurance companies have an obligation to their shareholders to make larger profits year over year. The shareholders never say “we’ve made enough profit on investing, we dont need more profit”.
If you consider only the mean, then of course you're going to be better off without insurance on average. But most of us don't care about the mean. We care about the variance. And when you buy insurance, you're reducing the variance in your life in exchange for a lower mean. The problem with insurance isn't insurance itself, but that often you pay and get nothing in return.
Well, it really depends on the risk of what you’re doing. Some things could really quickly get you into millions of $$$ in legal fees and other expenses for a tiny slip up, and it would be really stupid not to have some sort of backup plan to cover yourself.
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