Is life insurance considered gambling?

gamâ€§bleâ€‚
1.to play at any game of chance for money or other stakes.
2.to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.
â€“verb (used with object)
3.to lose or squander by betting (usually fol. by away): He gambled all his hard-earned money away in one night.
4.to wager or risk (money or something else of value): to gamble one's freedom.
5.to take a chance on; venture; risk: I'm gambling that our new store will be a success.
â€“noun
6.any matter or thing involving risk or hazardous uncertainty.
7.a venture in a game of chance for stakes, esp. for high stakes.

Now, if you have read and understood the able definitions from the dictionary, you will tend to agree that insurance is not a form of gambling. Death is a certainty, and not a game of chance as we will all die one day.

Hi everyone! Your friendly insurance guy here again. :)

Under the laws of the U.S insurance contracts are not a form of gambling. From a practical point of view, though, they are.

As other posters have pointed out, there are several ways in which insurance is gambling. With termporary (term) insurance, you are betting you are going to die before the contract expires and the insurance company is betting you will live.

The poster who said the odds are slightly in favor of the insurance company is off track. The odds are VASTLY in favor of the insurance company. The acturies (statisticians who help determine how much insurance companies should charge for insurance based on the probability that an insured will die) and the others involved in underwriting and issuing insurance contracts produce an end result in which well over 90% of term contracts fail to pay out. People either outlive them, or, in another common scenario, they cancel or lapse the policy, and then die uninsured.

It is only because the odds are so unbelievably in favor of the insurance company (in come cases exceeding 99%) that allows term life insurance to be so inexpensive.

Consider:
Imagine you own an insurance company. You issue life insurance. Presently you have 100 contracts in force for $1,000 each. That means your total outstanding liability is $100,000. In order to stay in business, how much do you charge for the insurance? If you charge $100,000 overall, no one will buy it, because they could just stick the money in a mattress. Insurance is only purchased if the buyer anticipates receiving more money than he spends in premium. If you charge everyone $100 for it, you will collect only $10,000. That means you have to make sure you issued policies that no more than 10 people will collect on, or you've lost money.

That's where actuaries and the underwriting process come in. They hve to help pick people to insure that are very unlikely to die. Otherwise the insurance company goes out of business, nobody is covered, and everyone loses. Either you have to design your products, and acceptable risks (people you will issue polcies to) so they will almost never pay out, of you HAVE TO charge a lot for the insurance. Otherwise the company goes bankrupt when the insured people die. This is the ONLY reason inexpensive term insurance can exist.

On permanent products, the bet you make with the insurance company is different. It's not "Will the insured live or die?" The bet is "HOW LONG will it be before the insured dies?" When you buy permanent insurance you are betting you will die sooner, the insurance company is betting you will die far in the future.

Again, insurance contracts are not gambling in the eyes of the law, at least not here in the USA. They are gambling, though, from the practical view of what they actually are and do.

The other side of the coin, however, is the gamble of NOT having insurance. The bet we make when we do NOT have an appropriate amount is this:

"Will I make and save enough money to adequately provide for the ongoing support of my surviving family, business partners, etc. before I die, or will I die before that and leave the people I care about in the lurch?"

Either way there is a gamble. The question is which gamble you wish to take. In my opinion, if you have the means, the best "bet" so to speak is permanent insurance. Yes, the monthly cost is higher, but you darned well know your survivors are not going to get the short end of the stick because your policy expired.

Best wishes, and feel free to contact me with questions.

No

Gamgling is: Thinking that you have no chance of passing away and leaving you're wife and kids with the mortgage and little or no money for retirement and/or college, because the life expectancy tables say you'll live to be 75.

A financial plan without insurance (i.e. contingency plan) isn't a plan, it's a bet. You're betting nothing will go wrong.

Yes and no. I guess it depends on the "gamblers". With this kind of insurances there are always people who win and people who lose. There are cases when the death of a person can't be covered by the insurance, although he paid for it all his live and people who could kill a person for cashing the insurance. But ordinary people just want to continue to help their family after they die. This is not gambling. It's caring about the ones you love.

lol only if you buy and sell them all the time

Yes. It's a form of gambling. Any situation over which you have no control, but still have a monetary interest is gambling. This is why most life insurance won't cover suicide -- it's like point shaving.

Yes, and usually the house wins!!! lol

No
It is real financial security for your dependents

yes, you're gambling your gonna die, the insurance company is gambling you're gonna live - so if you win, you lose! However, those you leave behind you will get the real prize!

all insurance is nothing but a bet, isn't it intersting how super powerful the bookies (insurance companies) have become, what does that say about our nation?

In Gambling there is no assurance - But most life insurance are guaranteed -shop around visit www.newyorklifeinsurance.com

No, because it is certain you will die some day...you just don't know exactly when. Also, it can be a rip off if you don't have dependants (children) or a spouse. Make sure you shop around.

sure, lots of things are

only when buying it while spinning the chambers on a .44 magnum revolver and pointing at your head

Do you have loved ones you would leave behind if you passed away?..if so, then YES it is worth the gamble. There is no such thing as "bad insurance". Even if you buy something like term insurance.. If you die within the term then your family/loved ones you have the security to know that your loved ones will have a sense of security. If you live beyond the term then you live! so either way you win.

It is worth the gamble, just make sure you buy the life insurance right for you. If you have a good agent they will be honest with you.

PLUS insurance is not considered "gambling" because gambling has a chance of both loss and gain while insurance is just the chance of loss.

Gamble?

No, I don't think so.

It's protection for your family if you die, can't work anymore or need to be taken care of in old age.

Only good things happen if you have insurance.

The REAL GAMBLE is not having insurance.

Without insurance you are betting that nothing bad will happen.

You win what you save in cost for insurance.

You lose you loved ones suffer very badly.

Yes, by not getting insurance you are the gambler! Hurting my loved ones is a price I do not want to pay! Investing more than a small percentage of you worth in the stock market is gambling.

Absolutely. And insurance agents and brokers, like me, are professional bookies.

Rates are all about odds. And the odds are stacked in the favor of the company, slightly.

And anyone who doesn't agree . .. doesn't really understand how insurance works.

Basically, you are betting that (insert covered loss here) will happen during the policy term, and the insurance company is betting that it won't.

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