This sort of thought implies not believing in insurance of any kind. Why should people pay into a common fund when only a small percentage of them will ever use it.
People can develop allergies during their lifetime, it's not just something that you're born with. There's also ongoing studies trying to desensitise people's allergies so that they can deal with foods more easily. So a person's allergy status can and does change during their lifetime.
But my message was about the general principle of insurance being the very thing your comment was against. The situation where the vast majority of people pay some cost of which only a few need to utilise.
> People can develop allergies during their lifetime, it's not just something that you're born with.
Sure, but the likelihood of that is low enough that insuring against that isn't worth it for most people
> But my message was about the general principle of insurance being the very thing your comment was against. The situation where the vast majority of people pay some cost of which only a few need to utilise.
No, the principle of insurance is that people pay to hedge against some event that has a reasonable likelihood of happening to them at some point. Whether it's a majority or a minority paying for it is not central to the concept of insurance.
Nope. Assume you have insurance with a one-time fee of $X. It insures against a single kind of event that happens with 60% probability, and pays out $1.6X. So the majority of people are likely to have the event happen to them. The EV of the cost to the insurer is then $1.6X * 0.6 = $0.96X, so the books are expected to balance.
Obviously I'm ignoring variance in this calculation, but you can easily adjust the numbers to give a margin of safety.
You have an insurer which insures you against an even that happens 1% of the time, but you are its one and only customer. The event happens to you, so the insurer has to pay you out. Since it doesn't have any more money than what you paid into it, it goes bankrupt and you do not get paid.
For insurance to work more people have to pay into the system than people who receive payment, otherwise the insurer will go bankrupt.
