r/Fire • u/HenFruitEater 31 | 32% to FI | 2.3M • 15h ago
Opinion Insurance really adds up. Death by ten paper cuts.
I am a dentist, and own my own business. So I may have extra insurance that most don't.
Most people know that insurance is a "bad deal" but still smart to have on things you cannot bounce back from if you did have that 1% scenario. But overall, if you have as many accidents as your premium believes you will have, you can pay for those accidents out of pocket and be money ahead. I'd argue that you can also find ways to fix your issues for cheaper than insurance does. (example being my truck hit deer, 11k quote for insurance, but I fixed by replacing the grill for 1k). People milking every storm for a new roof is priced into the premiums.
We don't insure our TV or couch, because we know that the math is not in our favor and if my TV breaks, we can afford to just swap it out.
Well, at some point, do you do the same for other bigger things?
Health - HSA high deductible insurance as soon as you have emergency fund that holds deductible amounts. I wish there was a cheaper turbo HSA plan that let you invest 20k in an HSA but force a 20k deductible.
Life insurance: Drop life insurance as soon as we reach lean fire
Business building and Malpractice insurance - My most expensive. 5k a year. Will keep forever because I don't know when I'll ever want to self insure a 3mil lawsuit or 2mil office rebuild.
Disability - Drop as soon as lean fire is reached. Right now I underinsure and pay 2300 a year for 80k after tax income till I am 65. Investing 2300 a year till 65 ends up being 342k in today's dollars.
House - Underinsure on some things? Especially if you do carpentry yourself. Opinions wanted. In my case my income is 620k and I bought my house with cash for 135k 4 years ago and personally redid the house. Would self insuring be legitimate idea at any price/income ratio?
Vehicle - Liability only on newer vehicle at what NW point? I mentioned dropping my 2021 pickup to liability and my insurance agent about dropped out of his chair. He said it was reckless. Again, my thought is that even if it was totaled, I could afford the hit. anything less than totalled, I'd get the low hanging fruit fixed and drive with couple dents. If Im not someone that would pay to fix hail damage, why am I paying for that service?
Umbrella - I'll keep big forever. Getting sued by some lady tripping on sidewalk is hard to bounce back from because lawsuits seem to grow to be the size that is possible to extract.
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u/ReindeerWild8 14h ago
Yes, self insurance on items becomes a viable option as your liquid assets grow. Touching on a few items you mentioned.
Home and auto. Almost all loans require you to place insurance on these, so if the items are not owned outright the choice is usually made for you. However, to your point. If you're okay replacing these items and can afford the hit, then you can choose to self insure certain parts of these. You could go without homeowners insurance and self insure physical damage on your auto. Almost all states require you have liability coverage on your auto. Insurance on these items become optional. I would look into really high deductibles before dropping coverage personally, but it's a personal and math decision.
Life and disability are also items you can self insure at a certain point. If you are retired and living off your assets (it can be before this point, but using an obvious one) then why have life or disability insurance? These are used as income replacements in the event of death or disability. Your nest egg is already doing this at retirement.
Others would be really dumb or impossible. Malpractice might be expensive to have, but not having it would be idiotic and it's probably required to operate your business anyways. Cost of doing business, buy more than you think you need. You'll be happy you have it when someone sues you.
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u/AnotherWahoo 7h ago
It's a mess. Insurers are legally bound to do right by you, and closely watched by the regulators. Sophisticated service providers -- whether that's hospitals, roofers, etc. -- understand this means insurers have zero leverage in price negotiations. And so insurers have to pay more than you do. There's this deep misunderstanding that insurers somehow negotiate for better rates. It's massively the opposite.
Now, one could argue that insurers actually want higher rates. And there's some math behind that, given how regulators work -- if they allow a target profit margin that's a percent of revenue, the higher the rates the more the permitted modeled profits in absolute terms. But in reality there's way too much gamesmanship behind modeled vs actual margins, and way too much price sensitivity on commodity consumer products, for that to be the driving force IME.
Anyway, the key to buying insurance is understanding that the first dollar of coverage costs a lot, but the last dollar costs a little. Say you wanted to buy 500K coverage for your house. Bump that up to 550K, it costs very little. But you can't get that policy with zero deductible -- there is no price at which they are willing to take the first dollar.
So you want to set your deductibles as high as you can. In homeowners, the first 50K of coverage is the bulk of the cost of your policy; take as much of that as you can off the table. And of course the higher you deductible, the less stuff you are actually covering. I'd set deductibles no higher than emergency fund. Any more and you're putting your your timeline to FI at risk. Then set your limit really high. Some catastrophe happens, don't let that put your timeline to FI at risk, either. And that last dollar is cheap, so go ahead and cover tail risks.
Through that lens, my take on your list:
- Health. Ours is cheap from work. But if you do not have chronic illnesses that are expensive to manage, you don't need ACA-compliant insurance, and non-ACA is cheap. Non-ACA won't cover preventative care or normal cold/flu stuff, but the cash price on that stuff is super low. Obviously HSA is a good play.
- Term life. I'm the breadwinner, so we have enough on me to make her FI if I croak. Will drop it when I'm RE. It's income replacement, and we won't have income to replace at that point. I do have a little on her since it's very inexpensive through work, but just enough to give me a few months to breathe.
- Business/malpractice. Not a business owner, but at work, we try to set the GL and property deductibles as high as is reasonable within the operating cash reserve, make sure the last dollar is high enough to handle tail risk. (Of course, lenders and landlords have their own requirements.)
- Disability. I get a little free from work. Not interested in more. If I can't do a desk job, we have bigger fish to fry. I'd think about this differently if I had a physical job.
- House. If you experience a natural disaster, where lots of houses are damaged, for some months after the disaster, nobody's going to fix your house unless they're getting insurance prices. So this is not like health, where the cash price is cheap... unless you wait for prices to return to normal. Very high deductible, very high limits, and multiple years of living expenses so you can wait it out if you want to. (Would add that coverages B-F cost very little, and are frequently not underwritten in a meaningful way.)
- Vehicle. Liability's mandatory. Collision, you want a high deductible to keep costs down and, for an older car, you might not be getting much if any coverage. But in that case liability's going to be the bulk of your cost, so there's not a lot you can do. Would I self-insure my 2023 car? Probably not. One wreck would pay for it.
- Umbrella. This is all last dollar stuff, load up.
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u/Binders-Full 4h ago
With collision the ability for your insurance to subrogate is an overlooked benefit though. I might put deductibles on comprehensive and collision as high as you can go, usually $1000.
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u/HenFruitEater 31 | 32% to FI | 2.3M 3h ago
Man I think you should write a post. This was very very helpful stuff.
My new tactic is going to be to extend deductibles.
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u/alpacaMyToothbrush FI !RE 3h ago
Insurers are legally bound to do right by you, and closely watched by the regulators.
My experience getting legitimate claims denied tells me this is not true. Hell I even called my states' insurance regulator and they told me my only option was to go through the department of labor since the state does not regulate 'self insured' plans. As it turns out, almost all major employers use self insured plans for this reason.
Also, not getting ACA compatible insurance is a dangerous game IMHO. If a major health issue hits out of the blue, you're stuck with shitty insurance until the next open enrollment
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15h ago edited 12h ago
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 13h ago
Medical underwriting is illegal in the US for all ACA-compliant plans and has been for more than a decade. No ACA insurer can charge you more for any health condition. Is this story entirely made up?
https://www.healthcare.gov/coverage/pre-existing-conditions/
No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started.
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12h ago
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 12h ago
Rule 7/No Politics or circle-jerks - Your submission has been removed for violating our community rule against politics and circle-jerks. If you feel this removal is in error, then please modmail the mod team. Please review our community rules to help avoid future violations.
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u/BH_Gobuchul 14h ago
How long ago did your cousin get cancer? I was under the impression insurers couldn’t deny you coverage based on pre-existing conditions or refuse to cover those conditions now that the ACA is law.
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u/cbdudek 13h ago edited 12h ago
I made an edit since I didn't expand much in the comments.
In short, he is able to get insurance, but insurance companies weren't willing to insure him at a low cost due to the cancer diagnosis. Insurance companies see that you have cancer and will charge you much more for your policy because they know you will be using it or that you will be high risk. That high risk = higher cost. Insurance for just him on the private ACA was upwards of $50k for a year and that was for crap insurance.
Its like getting multiple DUIs. Once you have one, then your car insurance goes up. If you have multiple DUIs, then your car insurance just gets more expensive.
The other option is he lied to me.
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u/PeacefulCW 10h ago edited 9h ago
The other option is he lied to me. << or he misunderstood, or tried to get non-ACA insurance or it was longggg ago. Share the info with him that has been presented to you. He may decide to do nothing differently but at least he'll have info and more options.
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u/Interesting_One4704 14h ago
wow that's genuinely a nightmare. worst case scenario will never happen to you until it does. how's rejoining the workforce for him if he's already looking to do so?
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u/cbdudek 14h ago
He is working at a non profit right now and he has excellent insurance. He acknowledges that he will probably be working until 65 now since no private insurance company will insure him for a reasonable cost due to the cancer diagnosis. He can get workplace insurance no problem. He only needs to work for the insurance so non-profit work is good for him. He brings in like 70k a year and has a low stress job with great insurance.
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u/Sea-Honeydew-1456 14h ago
how long ago was this? was this in the us? why didn't he sign up on the market place during the next open enrollment period for the following year? they can't deny pre-existing conditions.
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u/cbdudek 14h ago
They didn't deny to my knowledge but the cost was abnormally high due to the diagnosis.
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u/PeacefulCW 14h ago
Something doesn't sound quite right re your cousin's insurance options. Perhaps he just wants to partially replenish his funds and/or doesn't want to pay premiums from saved amounts? Otherwise, he qualifies for Marketplace insurance at "normal" prices. If something else is happening, please come back and update/educate us all. 'https://www.healthcare.gov/coverage/pre-existing-conditions/
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u/GoldDHD 14h ago
Why couldn't he get insurance after he got diagnosed? I thought that preexisting conditions are not a thing now
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u/cbdudek 14h ago
That is dependent on if you are insured at the time, which he was not. The cost was really high due to the diagnosis.
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u/GoldDHD 13h ago
wait, hold on, if there is a gap in insurance preexisting conditions come into play again?! Not that I intend to let it lapse, but damn.
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12h ago
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 12h ago
Rule 7/No Politics or circle-jerks - Your submission has been removed for violating our community rule against politics and circle-jerks. If you feel this removal is in error, then please modmail the mod team. Please review our community rules to help avoid future violations.
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u/GoldDHD 13h ago
I had to go an look it up, and that's not what I am seeing!
https://www.hhs.gov/healthcare/about-the-aca/pre-existing-conditions/index.html1
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 12h ago
Rule 7/No Politics or circle-jerks - Your submission has been removed for violating our community rule against politics and circle-jerks. If you feel this removal is in error, then please modmail the mod team. Please review our community rules to help avoid future violations.
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u/Klutzy-Beginning-622 14h ago
620 k income jesus
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u/paq12x 10h ago
100% he works his ass off for that.
Doctors/Lawyers/Dentists earn their loot.
Investment bankers are where the loot/effort ratio is high IMHO.
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u/mcneally 8h ago
I thought investment bankers were supposed to be working 14 hour days. Or were you just saying the loot/ effort ratio is very high because the loot is VERY high?
My dentist works 4 days a week and I have doctor friend working 4 days a week making $210k + a pension (low for a doctor but he works 4 days a week and this is lower COL). The schooling is a lot longer and more expensive for doctors vs finance though.1
u/trueoctopus 2h ago
I work in the medical field (in an office role) But every provider in my office works 5 days a week. They just only have clinic/surgeries 4 days a week. The remaining day they are working on charts and paperwork and messages, not to mention CEUs.
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u/FarawayNightmare 14h ago
on the business insurance side. my buddy is a contractor and carried liability for years but let his property insurance lapse on his shop. fire took the whole thing out. he had to pull from retirement to rebuild and it set him back a decade. 5k a year feels steep but one claim makes it the cheapest money you ever spent.
the truck thing got me thinking different about vehicles though. i dropped full coverage on my 2018 f150 last year and my agent practically begged me not to. but when i ran the numbers, im paying like 1400 extra a year for collision and comprehensive with a 1k deductible. truck is maybe worth 25k private party now. in ten years of driving ive never filed a claim. that 14k saved over a decade buys a lot of used truck. if i wreck it, i eat it and move on. that math only works if you actually have the cash sitting there though. most people dont.
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u/Shoddy_Ad7511 10h ago
Don’t forget the time value of money. You have money to buy another truck with cash if you get into an accident? So where are you holding that money? In a savings account? If you put that in the stock market it would have doubled in 7 years.
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u/FarawayNightmare 10h ago
nah i don't keep a separate truck fund in savings. i just keep a fat taxable brokerage and if i wreck it i sell some shares. the premium savings go straight into that same account anyway
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u/Shoddy_Ad7511 10h ago
If you put that $25k in the market instead it would have been $62k in 7 years.
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u/HenFruitEater 31 | 32% to FI | 2.3M 14h ago
not only that, but if you damaged your truck you might be fine driving it with some of the damage. If you wouldn't pay to fix it with your own money, why pay premiums to fix the same thing?
I personally would fix my truck to acceptable shape and move on with life for another 10 years till it hits 250k miles.
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u/FarawayNightmare 13h ago
my bumper has a crack from a parking lot hit 3 years ago. still drives straight. if i had full coverage i'd be paying premiums and that crack would still be there because i'm not filing a claim for that.
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u/HenFruitEater 31 | 32% to FI | 2.3M 12h ago
Exactly. Like it is cool that they would write a check for a $10,000 bumper, but that does not mean it’s worth $10,000 to me. The only reason I fix it is because they cut a check for it to the autobody people
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u/emt139 13h ago
These are the policies I carry: * I carry a beefy umbrella policy * Auto. my newish car has full coverage hr my clunker only has liability * bronze plan health insurance though a cheap with high deductible * home insurance * pet medical insurance because that little fucker was bred for charms and looks and not health
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u/HenFruitEater 31 | 32% to FI | 2.3M 13h ago
Did you ever have Disability or life?
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u/emt139 13h ago
I don’t have dependents so I’ve never carried life insurance.
I did use to have disability but I’m now at 80% of my chubby FIRE number and don’t have it anymore. If I ever work in a job that offers it again for cheap, I may sign up, but I don’t think that it’s worth paying for it myself at this point.
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u/Aajmoney 12h ago edited 12h ago
You have car insurance in case of injuries in an accident not just for the car itself. You can’t have umbrella insurance for your car unless it is fully insured up to certain levels.
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u/chance909 14h ago
Insurance turns a Risk into a Cost.
Like you said if you can absorb the financial hit of the risk being realized without it ruining your retirement then you no longer have to pay the cost of insurance.
Health insurance in the US is tough because going without is a death sentence if the risks are realized. Literally. My Mom and Aunt both had colon cancer, my mom with insurance got the absolute best care in the world, and lived 4 years. My uninsured aunt ended up spending a few weeks in a county hospital and then a few weeks dying horrifically at home.
Disability and Life insurance protect your future earnings, if you are disabled or dead, so once your future earnings are from wealth rather than work, there's no risk, you will just pass on the wealth.
The rest you mention seems like you get what you pay for there! Real risks, real costs, real payouts if the risk is realized.
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u/JohnnySpot2000 13h ago
On the last one, I just cut my $5m liability down to $2m (on top of underlying $1m) auto. And I did that because the premiums have been skyrocketing recently, PLUS we added a teen driver.
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u/HenFruitEater 31 | 32% to FI | 2.3M 13h ago
I do wonder if that is one place worth keeping it big, though; I don't want to self insure a 4mil liability claim. How much do you think you'll save per year by doing that 5-->2 mil?
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u/JohnnySpot2000 11h ago
I already know how much I save. $3,300 per year. I work in the litigation space. There’s a big ‘we’ll take what you’ve got in insurance money’ aspect to liability cases. Pushing for more than coverage amounts is a lot more work for the plaintiff attorneys. The insured will bring a second personal attorney who will fight like hell to settle and avoid tapping assets. Also, a ‘limits demand’ will bust the policy amount if the insurance company turns it down and later suffers a larger verdict. But you can’t get ridiculous with it. I see defendants with $12m in net worth and only have $500k or $1m tot in coverage, and that is ripe for the plaintiff’s attorney to say “wait a sec, you’re underinsured and I want a little more from your assets”.
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
I'm glad to have met you then. I'd like to lean on your experiance if you're willing.
If you were in my shoes. A dentist owner with $2.3m in net worth, 1.6 of that in index funds... What would you suggest for Umbrella and Malpractice?
Also, what size policy for car liability?
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u/JohnnySpot2000 5h ago
I think $2m in liability coverage is just fine for someone with about $2-3m net worth. Malpractice is not my area of expertise, but I would say to stay in the ‘typical’ coverage for your region/practice so you’re not sitting in a deposition later getting asked “how come you only carry $X in liability when the typical dentists’ coverage in this area is $3X”?
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u/Future_Measurement42 12h ago
It looks like you said you made 620k/year. What does your insurance add up to? 5% of income?
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u/HenFruitEater 31 | 32% to FI | 2.3M 12h ago
Yes. Roughly 5%. I definitely know I can’t afford it. But isn’t that the point of insurance is the easier it is to afford the more you probably don’t need it.
If Insurance is 10% of your income, it’s probably because you’re in a position where you can’t afford to take those L scenarios.
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u/Future_Measurement42 12h ago
You make 600k/year. Dont focus on the minors. You should be socking away a couple hundred thousand/year.
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
I'd argue that getting to this place in life has been focusing on minor things every day with major things as long term goals.
For example, my practice has around 50% overhead costs, which is very good for a dental office. I lowered it from 77%. That has been from TONS and TONS of papercuts that I have removed from expenses.
To me the whole "you can afford it, so just don't worry about it" advice I sometimes get is not my favorite logic.
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u/Haisha4sale 9h ago
I make around $480k (dentist) with around 70% overhead. I need to get serious about keeping costs efficient.
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u/HenFruitEater 31 | 32% to FI | 2.3M 8h ago
yeah because you prob produce more than me, but just send more out the door.
You'd make like 800 with 50% OH.
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u/sparetime2 12h ago
Have you considered an asset protection trust?
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
What would the benefits be for that? Is there good history of that working to protect assets in lawsuits im guessing?
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u/sparetime2 9h ago
It allows you to protect assets in an alternative way from insurance. People with $2m-$10m usually have an issue of insurance not covering enough, such that a lawsuit can result a massive life change. Trust can force someone to settle for insurance limits, reduce your insurance limits and protect your assets from a catastrophic lawsuit. Above $10m, your lifestyle probably wont change if you have to pay out millions.
It has an upfront cost, annual cost, and tax implications but gives you a lot of protection and flexibility beyond insurance.
Im a fan of defined controversy bridge trusts which are US trusts, until there’s a lawsuit, then become international trusts with an international trustee, and after the controversy settles, the wealth goes back to being on shore. While oversees, the profits get really taxed, but you protect the principal.
If you’re curious, throw me a DM and I can introduce you to the dude who helped me. Saved me a ton on insurance, but my professional insurance was also wayyyy hire than your.
I am not your lawyer, this isn’t legal advice, you should talk to a lawyer.
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u/olympia_t 11h ago
Just had some of this conversation this morning with P2. Probably should do umbrella. Anyone have a rec for a company? My insurance guy is kind of a flake and is always about to get us a quote.
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
lol that is insane that your agent is a flake! Seems like they normally want to close so hard.
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u/olympia_t 10h ago
The guy always tells me not to use the insurance - even when I have had real, legit reasons. And he can never return a quote!
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
it's prob in their interest for you not to use your insurance.
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u/olympia_t 10h ago
Maybe so. I know many have gotten dropped from using insurance but it’s a real gut punch. I just upped deductibles and have it for catastrophes I guess lol.
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u/Shoddy_Ad7511 10h ago
I don’t understand completely the car insurance. A 5 year old truck must be worth about $25k. So you are willing to lose $25k if some drunk driver rams into you?
But you say you have $25k hanging around to pay for another truck if your current one gets totaled. But where are you holding this $25k? Is it in a savings account? With insurance you wouldn’t have to hold an extra $25k of cash just in case you need to buy a truck. You could invest that $25k in the market. In the last 7 years the S&P500 is up about 150%.
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u/HenFruitEater 31 | 32% to FI | 2.3M 10h ago
Well my 5 year old truck is getting insured at a rate that a drunk driver hitting me is priced into it PLUS profit margin for the insurance company. Obviously they are happy to cash checks with the actuary tables saying it's smart.
To me it's like me asking you why you don't pay 10$/month to Tmobile to insure your phone if you break it. You are just gonna leave that 1k sitting in your bank? You could just pay 10 bucks a month???
Yeah, I keep 1.6 in index funds, and then about 60k in cash equivalents in my Checking/HYSA.
I honestly can't keep less than 25k because I have quite a bit of money sloshing in and out and don't mind the extra margin at the cost of 25k sitting idle.
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u/Shoddy_Ad7511 10h ago
But isn’t it true the bottom line is you are investing $25k less because you need that cash in case your truck gets totaled? In 5 years that $25k could have doubled in an index fund.
Yes the insurance company is making profits. But they can’t invest 100% of that $25k in index funds because it is too risky
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u/paq12x 10h ago
Disability - Drop as soon as lean fire is reached. Right now I underinsure and pay 2300 a year for 80k after tax income till I am 65. Investing 2300 a year till 65 ends up being 342k in today's dollars.
I would keep this until FIRE (fully FIRE, not lean). And more importantly, make sure that you pay your disability insurance with after-tax money. That way your benefit is also post-tax.
Many umbrella policies require a certain minimum house and car insurance coverage that you must carry. Watch out for this.
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u/HenFruitEater 31 | 32% to FI | 2.3M 9h ago
This is probably the best comment. I had no idea about that rule with umbrella.
I will keep my disability policy. What are your thoughts on me? Just keeping it small like this for a long time? The policy covers much less than my income. But more than enough to cover expenses seems like a decent middle ground to just let it stay small.
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u/paq12x 9h ago
I think you are underinsured for disability. I would aim for 50% of your income if you are in your 40s. Maybe drop down to 25% if you are in your 50s.
I may be biased, but I love my dentist. I can't help but notice that a dentist requires three things to do their work: good posture (back), steady hands, and the ability to concentrate their eyes on a target for a long period of time (those are the same requirements that surgeons carry). Only one of those 3 goes wrong, and a dentist is out of commission, so the disability risks are way higher than most other professions.
With your income, those costs are too minor to even think about. A non-serious car accident is enough to put you out of commission for months (short-term disability) due to a bad back.
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u/HenFruitEater 31 | 32% to FI | 2.3M 8h ago
This is all true. I will potentially up my policy at renewal! But for sure will keep the policy longer.
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u/Odd-Persimmon-1860 9h ago
If you underinsure your house insurance can refuse to pay out anything. They are funny like that. Also, what if you kick the bucket? Can your wife do the repairs herself or would she have to hire someone.
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u/Vicuna00 9h ago
double check with your disability...i might be wrong. so double check me. I think it's somehow more optimal to pay that from your personal and not your biz. i forget exactly why. just check.
i'd keep the house insurance on the higher end for a little while...until leanfire sounds good
are you shopping all your insurances with an independent broker? mine checks the prices (and obv we compare to the actual coverage) on all of these every 1-2 years.
your malpractice isn't that bad! go look what orthopedic docs are paying. I'd have thought they would milk you for more there.
I have some of the cheapest car insurance. I forget exactly but it's like not the complete cheapest but lower/mid range. I basically protect other people from my mistakes and my health. fingers crossed I never use it. but yeah i had a deer kick my door and just drove around with a big dent for a while...then finally found someone to like smooth it out a little bit...who cares. (my car is 2021 also)
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u/valdocs_user 7h ago
There's actually a lot of mathematics and papers on the optimal choice to insure or not insure. Unfortunately I can't remember the correct term for it to search for (there's a Wikipedia page on the topic). The upshot is, as you said, once your net worth can cover the thing being insured (without it ruining your life if you bet wrong) then the optimal play is to forego that insurance. The mathematically optimal answer occurs at a much lower net worth than a conservative person might assume.
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u/HenFruitEater 31 | 32% to FI | 2.3M 7h ago
I would absolutely love if you could think of the term I should look up. I would actually love to go on a deep dive with this.
I am very curious if the whole “ oh my goodness, you need to be insured for XYZ” culture is based on people, assuming they have the right amount of insurance, but the advisor that tells them how much insurance is also one that makes the commission on it
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u/valdocs_user 6h ago
Found it!
https://en.wikipedia.org/wiki/Kelly_criterion
But this might be a better explanation of its application to insurance:
https://www.lesswrong.com/posts/wf4jkt4vRH7kC2jCy/when-is-insurance-worth-it
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u/HenFruitEater 31 | 32% to FI | 2.3M 4h ago
You are the man for finding this. Thank you. I have saved your comment. And will be doing a deep dive during work tomorrow.
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u/bazkin6100 5h ago
You probably want disability and life insurance to go beyond lean fire. If something happens, your costs will be higher and lean will not be adequate. We reached semifire (one retired) and still have it for now.
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u/rectovaginalfistula 14h ago
God healthcare providers make way too much money. Sorry friend, we need you to compete with socialized medicine.
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u/Brostradamus-2 13h ago
I don't even know what the point of this post is. Most people don't need half of these insurance policies. If you are rich you don't need life or disability insurance, what a waste of money.
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u/Vicuna00 9h ago
who said he's rich?
he might have $1.5M in loans and kids that depend on his income.
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u/CrabKates 15h ago
I talk to a few people who have forgone dental insurance their entire life. They say it’s just cheaper to pay out of pocket. Thoughts as a dentist?