Does Sebelius Know What Insurance Is?

How can insurance make everyone better off? ?

After all, the insurance company has to make money. ?That has to mean that the expected value of the claims they pay out is lower than the expected value of the premiums their customers pay in. ?In some sense, then, the expected value of your insurance premium is negative. ?

But insurance does make everyone better off, because it covers very large costs that most people would have trouble paying. ?Even most really good savers would have a hard time replacing the value of their house, or paying off a $250,000 judgement for an auto accident. ?The expected value of those incidencts is very, very negative--more than just the value of the cash, you have to factor in the horror of being homeless or bankrupt. ?When you factor in the homelessness, the bankruptcy, and so forth, the slighly negative expected financial value is more than outweighed by the positive value of being protected against personal catastrophe. ?Not to mention the peace of mind one gets from not having to worry about homelessness, etc. ?

Source: http://www.realclearpolitics.com/2013/04/01/does_sebelius_know_what_insurance_is_304961.html

walmart black friday walmart black friday Target Black Friday PacSun apple store bestbuy bestbuy