For an individual it kind of is. To calculate the financial value of an insurance plan you would multiply the average cost of a claim by the probability of it occurring, and divide that by the average expected number of months until claim. For all insurance, the monthly fee is more expensive than the calculation above. This is obvious, because the insurance company needs to make a profit. This implies that no one should ever have insurance. *However,* some events are quite financially catastrophic, and the potential size of the financial burden warrants paying the premium. Examples include houses and cars. Most people can't afford to pay out of pocket if a house burns down.

In the realm of consumer electronics, why would you pay the premium if you can afford to replace the device? Unless, of course, you know you're prone to losing or breaking things.

What wat points out is that if you have the finances to replace a device yourself at any point in time due to an _unlikely_ event, it's just a waste to pay a third party for the insurance if _you can handle the risk yourself_.

Applecare+ for an iPhone seems to run at about 80% of the device cost over 5 years, however if you were likely to buy a new device after 5 years anyhow then short of fully losing your new devices every 2.7 years (or replacing the screen every 8 months or so) you're at a financial loss to go with the insurance compared to just buying new devices when the need arises.

That's how I think about it as well. How should I be thinking about it?

Care to elaborate? There's some wiggle room with "afford" which should make it exactly how risk management works.