Financial planning textbooks teach us that insurance is the prefered way to reduce the risk of devastating consequences of rare events. Yet real life experience has proven time and again that insurance is unreliable for such an essential purpose.
Over 30+ years as a financial adviser and business owner, I can only conclude that purchasing an insurance policy simply adds one more level of risk. I’m not saying that insurance does not have value, but it is not the pure risk transfer mechanism that we tend to believe. Some cynics put it more directly: “insurance is the business of mirage”.