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Comment by remotecar | Hacker News Reader

Why doesn’t “buy it yourself” solve the problem?

I could just as easily alter the variables for various mortalities to make $150/month seem expensive by that logic. Paying $150 vs $300 per month for life insurance doesn’t suddenly make it “worth it”

What? Of course there is a dollar amount where people switch from "worth it" to "not worth it". Here is a thought exercise. Would you buy the same insurance plan for $0. Of course, it is free. Would you buy the same insurance plan for $500,000. No of course not, that's the payout. Everyone has a different dollar amount in between based on the risk aversion, their own valuation of "peace of mind", and their perceived likelihood of using it.

Yes of course there is a dollar amount where it stops becoming worth it, but the primary rule is simply whether the amount is sufficiently negligible. It is not whether the amortized return on investment beats the specific dollar amount.

As a thought experiment, would you pay $500,000 a month if the payoff was $5B?

It is only available if you are in good health; if you are in bad health than it is impossible to get life insurance at an attractive price. This is fair, because of course folks in bad health are likelier to die sooner. But that makes the value of group life insurance very high to those individuals — it is a wonderful perk for them.

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