Do we really need insurance?

Question

Do we really need insurance?

Life insurance, why can't we just be cremated?
Who need a $100,000 worth of funeral?

Health insurance, why can't we just pay out of our pocket, health
insurance won't pay for our medical anyway.

House insurance, why can't the government help us out?

Car insurance, my mom paid $1,000 annually for 15 years...
and the old car got totaled and we only get $4,000.
That isn't fair.

I feel insurance companies rip us off.

Answer 1

The other answerers already did a good job of explaining how important insurance is.

Have you ever paid for medical expenses out of your own pocket? I'm guessing not.

Why don't you try living without insurance for a while and let us know how it works out for you. It may feel like you're getting ripped off, but if you were to ever get in a bind, I'd be willing to bet a million dollars that you'd wish you were insured.

BTW, I'd like to see a $100,000 funeral. Must be a real blow out.

Answer 2

Insurance is meant to cover expenses that the average person cannot afford to pay.

Your mother paid $15,000 in auto insurance premiums spread out over 15 years. Then the car was totalled and the company paid out only $4,000.

If the car was totalled in the first year it was insured, the company would have paid out more (like around $15,000) and had collected only $1,000.

Your mother could have hit another car and totalled 2 cars and the insurance company would have had to pay out for both cars. What if the other car was a Mercedes?

Your mother could have been severely injured or could have severely injured someone else. The costs to the insurance company would have been much greater.

The government has no business in providing replacement housing for those that are uninsured.

Insurance, for most people, is necessary.

If you feel it is a rip off, don't get any insurance. When something bad happens, look to the person in the mirror to help you out. If an uninsured driver hits you, don't look to collect anything from the other driver.

You REALLY need to learn a lot more about personal finance and how insurance fits in.

Answer 3

Every one fusses about the cost of insurance until they need it.

I just had a surgery that cost $16,000 - sorry could not pay that out of pocket. I have a medication for asthma that costs $140.00 per month. Can't afford to pay that out of pocket. Only rich people can afford health care costs out of pocket. So, you are either very rich or very young and have not had to incur health care expenses.

Life insurance - is not for the funeral. It's for the surviving family members to help them make up for your loss. A House wife does not bring in money. But - if you had to hire someone to cook, clean, raise the children and do every thing a house wife does - it would be very expensive.

Car insurance - ok.... you had one claim and were paid 4000.00. However, what if your mother had caused an accident and badly injured someone. I bet you would be thinking differently if the insurance company paid out $100,000 to an injured party to keep them from suing you and taking your parents house, retirement funds and any other assets they may ever have. Lets see - 15 years x 1000 per year = 15,000 vs a 100,000 liability payment to keep you from getting sued and losing everything you ever owned. Hmm.... sounds like a pretty good deal then.

And besides.....if your mom did not have insurance how much would she have been paid for the car? $0.00. So, $4,000 is much more than $0.00.

House insurance - it's not the governments job to insure your home. You own the house - it is your responsibility to pay for the damage to it. You signed the mortgage - not the government. The homeowners insurance pays if your home is damaged by a covered loss. If you think taxes are high now wait and see what happens if the government had to pay for every homeowners claim filed. I alone paid out over 1/2 million in homeowner claims last year and I'm just one adjuster.

Insurance is one of those things you buy and hope you never have to use b/c if you are using it something rotten happened. It's not like a new pair of shoes where you pay for it and get to carry it home in the bag and use it right away.

Answer 4

LOL you don't spend the $100,000 on the funeral. If you don't have kids to support, etc, you don't need life insurance.

If you can afford to pay out of pocket for health insurance, great. A bad slip, broken ankle, and surgery to fix it will likely run you $50,000. Most people (including the very rich, who know how to manage money) would prefer paying a small amount every month, to risking filing for bankruptcy (uninsured medical bills are the #1 cause of bankruptcy). If you want to go uninsured, fine. But don't come asking for a handout because you can't afford the chemotherapy you need to treat your cancer.

Just WHERE EXACTLY do you think the government gets it's money from? ME, the WORKING PERSON. You, I guess, are planning on living off welfare the rest of your life, so why would you care that *I* am paying huge taxes?

Car insurance - tha't's not how it works.

House insurance - if you don't choose to insure your house, well, you won't find someone willing to LEND YOU MONEY to buy one, ditto for the car. So I guess that means you're independently wealthy. The law doesn't require you to buy health insurance. Or ANY insurance. Those are CONTRACT requirements. You're agreeing to the contract. So, DON'T AGREE!!!

Insurance companies are bookies. You place your bet one month or one year at a time. When you lose the bet, you don't get your money back. When you win the bet, well, the ODDS pay out in the long run.

I assume you don't smoke cigarettes, and NEVER gamble (including buying lottery tickets), as both of those are MUCH MUCH MUCH more of a 'ripoff' than insurance policies.

Answer 5

You really are taking a simple view of things. Nobody needs a $100,000 funeral, but if you die leaving young children, or you are the family breadwinner paying the mortgage, life insurance can ensure you haven't left your family in abject poverty.
If you get cancer, or have a heart attack, or are bitten by a malaria mosquito, or fall of a bicycle and hit your head on the pavement, how deep do you think your pockets have to be if you want to pay out of pocket instead of having insurance to pay?
Why should the government be responsible for YOUR house? And if the government is going to be responsible for insuring homes, does that not make the government responsible for purchasing everybody a home? How much do you think taxes would have to go up to cover that?
As far as car insurance goes, coverage on the car is the least of a person's worries, and insurance is not like a bank account. If your mom got $4,000, that is what her car was worth. Do you know what I got out of insurance? About the same amount for a vehicle, but also a hospital stay, and very expensive neursosurgery. If I didn't have car insurance at the time of my accident, I would have been looking at dipping into my pockets for at least $500,000 for my injuries, hospital stay, specialty surgery, follow-up treatment, etc.
Insurance is there to protect us from financial disaster, and none of us really want to use it. The principle of insurance is simple: to share the losses of the few among the many. Unless you are a billionaire, you need insurance to protect everything you have, and are going to have, because you are one disaster away from having nothing.

As far as not buying insurance from someone who drives a nice vehicle, I submit this. Would an insurance broker driving a beat-up 20 year old Chevy look like he perhaps was not very good at his job, like maybe he didn't know enough about insurance? Would a broker driving a Mercedes perhaps look succesful because he knew his job? I took university level courses to get my broker's certifications, and I have to take courses every year to keep licenced. I can make a decent living by selling people the insurance they need, and being honest, as by far the majority of brokers are.

Answer 6

Health: Although rare, health care expenses of several million dollars do sometimes happen. Most of us cannot pay that out of pocket because we do not have that much money. (Bill Gates is one of the few exceptions.)

House: It is not fair for the persons who cannot afford to buy a home to have to pay taxes to pay for the replacement of someone else's home.

Funeral: I agree. We do not need $100,000 funerals.
Life, in general: An employed person married to a full-time homemaker with small children may need life insurance to ensure that the surviving spouse has enough money unti the children are old enough for the surviving spouse to return to the workforce.

Car: Collision and comprehensive coverages are not needed for a 15 year old car. Liability coverage is needed for a car of any age, because you pay get sued for hundreds of thousands if you injure someone else. Collision and comprehensive are needed for new cars that are purchased with a car loan, so that the lender does not lose money if the car is wrecked/stolen and you stop making payments.

Answer 7

Then I would suggest you cancel all your policies, and hope that you:
Never get into a car accident, and have to pay out of pocket possibly tens or hundreds of thousands of dollars.
Never die and leave your loves ones anything, so they can suffer the consequences.
Never need health insurance because you know you will always be young, and not realize a 3-day stay in a hospital, depending on circumstance, could be $20,000.
Never worry about a tree falling on your home or a flood, because you have several hundred grand hanging around to build and furnish another home.

GOOD LUCK!!!

Answer 8

I feel that they do too... BUT... insurance is for "in case something happens... " like if your Mom had been hit by another driver then they would have to pay for your car, AND the docotr's bills AND any time off from work your Mom would have had... so many drivers drive now-a-days without insurance and that is not only a shame it is also a crime... my truck got totalled too, and I only had 2 more payments to go on it, and I got $3,000 less than what I had paid for it so I do understand how you feel...

Answer 9

Buy the insurance you need, not everything insurance companies sell. If you don't have anyone dependent on your income to live then you don't need life insurance (it's not to pay for the funerel). Insurance companies and salesmen will try to sell you everything under the sun if you let them. Educate yourself first then decide what you need.

Another piece of advice...if they are driving a Hummer don't buy anything from them. They obviously are good at selling people stuff they dont' need - how else do you think they got the Hummer?