All insurance is -EV, + utility
Look, any insurance is negative EV. It is a zero sum game. How on earth would an insurance company make money if they were giving you +ev? All insurance is +utility, otherwise you simply would not take it. Now people may say that insurance companies run their underwriting book at a loss and make up the money by investing, but that does not make it +EV for you. You could have invested the money too. Lending someone money without recieving a sufficient rate of return is -ev. You could have put it elsewhere. Something being -ev does NOT make it bad. And Rays comment is not correct. It does make sense to be insured even if you are of regular risk for your group, if you are by nature more risk averse than a certain, break even utility point.
|
08-25-2005, 11:23 PM
Linear Mode
