Insurance

Insurance seems like a racket. It is a lose-lose situation for all who purchase it. You pay a certain amount of money, and hopefully you have good luck and never have to collect on your policy. In that case, you are getting ripped off and paying for someone else's health or driving problems. But maybe we're helping our neighbors and being charitable this way. In the case that you collect on whatever policy you have, something worse than a monthly premium has happened. You can't win. And insurance companies turn a profit off of our dilemma; otherwise, they wouldn't exist. Unfortunately, I can't think of a better alternative to this socialized (at least it's voluntary) system. You could try to pay "premiums" to your own insurance fund, but in the event that something does happen to you, especially in the early days of the fund, your problems won't be paid for by others; you will be financially responsible for your own problems. These costs could equal or exceed your fund. We can see that there is an serious risk to such a strategy, although it decreases somewhat later on, as your fund grows. If nothing happens to you, you will still have your money instead of an insurance company down the road. But if something happens early on, uh oh. This is a risk that many people would not be willing to take even if their employers did not provide insurance, and the fact that they do makes it convenient. I understand now why insurance is a huge business.