Now I prefer to save for education funds rather than buying educational insurance. Savings are more flexible and when you have more money you can save more and when you have less money you can save less. With insurance you will have to pay the premium even if you are out of job or have less money otherwise you will end up losing the insurance.

I am not cutting back on all insurances as I am also worrying about unforeseen events or circumstances that may arise. I still keep my husband’s life insurance because he is the main bread winner. I also have the fire insurance for our house.

I do not buy medical insurance because it is covered by my employer and for major medical problems I will go to the government hospitals. I am living in Hong Kong and it is relatively cheap to get medical help from government hospitals.

You’re absolutely right – until something happens, I think many of us just see insurance as money wasted. However, as Murphy would probably have it, the minute we cancel insurance coverage, we get hit with a catastrophe! Go figure.

I also have a distrust for insurance salesmen, particularly because they have a conflict of interest in the transaction – the money they make off a commission. I prefer to research and purchase my insurance online, where I know I can find some independent advice and good rates.

Currently my husband and I pay a homeowner’s premium for our condominium, which ironically has the outside walls already covered.

I guess until you have had something happen to you that you need to use your insurance for you don’t see the value in it. I have had to use medical insurance for an outpatient operation so therefore it is worth it for me to have. However it still pains me to have to pay a hefty co-pay each time I visit a doctor – what is the point of the monthly premium which is not a low cost plan?

I have also had to use car insurance so therefore I see the value in that as well, especially being so vulnerable on the roads nowadays!

All in all when I think of insurance, I think of people that make really decent incomes selling it. So therefore it seems like a money making scheme that they are being well compensated for.

Personally, I don’t carry full coverage on our car because if it is totaled, it’s rather inconvenient, but I would manage just fine. I do, however, carry enough term life insurance to replace my income if I should meet an untimely death in the next 20 years. My goal is to have enough assets when that 20 year term is over to be “self-insured”.

So, my take is that you need enough insurance to pay for relatively likely (humans have a 100% mortality rate) events that you can not afford out of pocket. I can afford to replace my car (even if its just with a beater), but I cannot afford to provide for my family if I am unable to work. I have health insurance with a high deductible because I can afford small medical bills, but cannot afford a medical catastrophe.

Of course, once I have enough assets to be self-insured I’m going to need some additional liability insurance…

A little cost-benefit analysis never hurts when it comes to trying to get the “best” insurance “just because.” Often, we look at the small expenses, like doctor’s visits, without thinking about our real monthly costs and what insurance is really meant to protect us against – the big stuff.

You should never count on NOT needing to cover expenses that may arise (car bills, health bills, etc.) but I’d rather control my money and manage my risk than pay toward something that I may never use.

As an example, I’ve always spent a ton of money on a PPO health insurance policy, just because that’s what I’d always done. But I’m pretty healthy and haven’t gone to the doctor in quite awhile (probably shouldn’t be saying that, but whatever). So switching to a low premium, high-deductible HSA health plan makes way more financial sense for me.

Thankfully, medical and auto insurance is more or less a standard in this country, at least for those who are able to afford it with any degree of comfort. They would be my first choices as well if nothing else was possible. Like you, I’ve seen what even quick hospical stays can do to people’s finances.

Here’s an interesting question based on your comment – do the wealthy need to insure less (because they can self-insure) or insure more (because they have more to protect?)…Hmmm.