Life insurance is purchased more for signaling than as a financial instrument. (Life insurance was unsellable when the product was invented; the concept of your family profiting from your death was morbid. Salesmen eventually realized they had to market it as something a man purchases to provide for his family in the unlikely event of his death; buying it was buying the identity of a successful family man.)
Life insurance is purchased more for signaling than as a financial instrument.
I originally wrote “otherwise people won’t buy insurance”, then recognized the difference, and posted the phrasing “otherwise people shouldn’t buy insurance”. A lot of insurance really does have positive expected value.
Life insurance is purchased more for signaling than as a financial instrument. (Life insurance was unsellable when the product was invented; the concept of your family profiting from your death was morbid. Salesmen eventually realized they had to market it as something a man purchases to provide for his family in the unlikely event of his death; buying it was buying the identity of a successful family man.)
I originally wrote “otherwise people won’t buy insurance”, then recognized the difference, and posted the phrasing “otherwise people shouldn’t buy insurance”. A lot of insurance really does have positive expected value.