Date: Sat, 3 Dec 2005 04:01:07 -0600
From: hatespam@hatespam.com (Veritas)
Newsgroups: misc.invest.financial-plan
Subject: Re: Self-insurance
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me@privacy.net wrote:

>"bo peep"  wrote:
>
>>It's simply not possible in some areas for most people. For instance
>>health - you could be diagnosed with an illness today that would
>>generate 6 figure or even 7 figure medical bills in just a few months.
>>Do you have enough in your checking account to cover a $250,000 medical
>>bill? (if answered yes, is your real name Bill Gates?)

This is the crux of the matter. If you can gaurantee that you're an
"average" person - i.e., you'll always have only average medical
expenses, then, yes, you're better off paying out of pocket. As has
been explained, you're one of the people the insurance company makes
money off of.

The problem is that, without a crystal ball, you never know when
you're going to get sick/sued/etc and incur huge expenses. At that
point, you'll become one of those folks the insurance company loses
money on and it suddenly is in your best interest to have it.

So, for most of us, we're better off paying for the insurance to cover
the risk of extraordinary expenses. Even though most of us, in the
long run, will pay more to the insurance company than we ever recover.
But, the downside risk is too great not to do it.

Bill gates, of course, won't miss a few hundred thousand for
chemotherapy if he needs it. I will!

>But is there someway to limit or eliminate that from
>happening..... breaking the bank?

Yes. It's called insurance!