Virtually all forms of insurance have a negative expected return, because the insurers have to have a reason to take the risk.Mark Leavy wrote: ↑Sun Sep 27, 2020 9:00 amI think you have correctly described the Mark Leavy filter on reality.Libertarian666 wrote: ↑Sun Sep 27, 2020 8:08 amIt is well known that the majority of fire alarms are false alarms.Mark Leavy wrote: ↑Sun Sep 27, 2020 7:03 amFried the electronics in about 2 seconds. And no, it will never work again. But also, no visible signs of sabotage.MangoMan wrote: ↑Sun Sep 27, 2020 7:00 amSeriously? And if so, it still worked after that?Mark Leavy wrote: ↑Sat Sep 26, 2020 10:44 pm It still kept wailing - even fully removed. So I popped it in the microwave for a few seconds. That silenced it. All good now. Everything reassembled.
I'm not a big fan of fire alarms. 100% false positive for my entire life.
It is also well known that the best way to prevent false alarms is not to have a fire alarm at all.
In fact, we can extend the same reasoning to any unlikely event.
What are the chances of dying before age 60? Very low.
Thus, life insurance for younger people is a waste of money.
And of course it's too expensive after age 60.
So why buy it at all?
Hmm, maybe there's something this analysis overlooks...
I am also not a big fan of any form of insurance.
Which is why it is foolish to insure against events whose costs you can absorb without too much difficulty. Why pay someone else to take a risk that you can afford yourself?
But there are risks for which you need a risk pool, e.g., outliving your savings.
In that situation, you can optimize your spending by buying an annuity.
Of course, if you have plenty of money to spend even if you live a very long time, especially if you care about leaving a legacy, then there's no reason to buy an annuity.
