Have you ever really thought about insurance? I am sure you have, and you as well as I, most assuredly, have insurance of some description. The whole notion seems a little bizarre to me. We pay for insurance for the warm feeling we get with the policy but we are buying the ethereal, the intangible, the peculiar hope that perhaps we will be unlucky enough or careless enough, or someone else will, and we will be "covered".
Most of us pay premiums on our insurance policies (sometimes begrudgingly) with the hope that we will never see any benefit from these. If we make a claim, it is because something terrible has happened to us. If it is life insurance, you have passed away. Claiming auto insurance means, most likely, that you have had an auto accident and there is damage to life, limb or property. With fire insurance, your home has burned down. If the claim is for medical insurance, you are sick and require attention, drugs, repairs or all three, or have broken a body part. With crop insurance, you have had a poor year farming, or some weather catastrophe has reeked havoc with your livelihood. Employment insurance helps when you have lost your job, still not a good thing.
We hope that these things never happen but so does the company with which you are insured. If you make a claim, profits drop. The insurance company benefits more if no claims are made. But this is the only way that you can get value from your insurance dollar - if something terrible happens to you or your insured ones. It somehow seems wrong to sell something to consumers with the hope of everyone involved that no benefit is ever realized by the consumer. One is buying a warm feeling of financial security for something that you truly wish will never happen. That is certainly why whole life insurance is so expensive - you definitely will make a claim, guaranteed, once. No personal benefit is realized except the warm feeling that you have provided for your loved ones.
Yet, some insurance is legislated in developed countries - at least auto insurance is. I do understand why one needs insurance in a world that is filled with danger - the possibility of that danger turning into something so traumatic that lives are changed forever, not only your own life. I know, as well, that insurance companies are some of the wealthiest organizations on the planet. An insurance company will refuse to insure you if you represent a risk to their profit. That company will raise your rates significantly if your apparent risk level increases. Some will drop your rates marginally if you represent less risk. An insurance company can not help but make substantial amounts of profit from essentially no product, only the possibility or probability that something terrible will happen to you. The lower the probability is, the greater the profit becomes, and the happier everyone is, including you and I. Still you will pay premiums. In a truly safe world, which is what the insurance company is striving for, and also what most people would prefer, the insurance company keeps it all (100% profit, with no claims).
So as we head towards that wonderfully safe planet with all of our legislated and trained safety, products that meet the stringent requirements of our safety standards associations, what we are really doing is building even greater profit for companies with no product, which we will support until it's too late to qualify for anything but death benefits.
I cannot see a way around this, and indeed, cannot get around it. It just perturbs me to think that such a non-productive part of our modern world will or does likely own or control most of the rest of that world by selling us (most of us) a feeling.
