The problem with humans is that, well, we’re human.  It means we’re subject to making decisions not in our best interest.  We’re easily distracted and excitable.  We want to believe what we’re told.  It’s a recipe for disaster.

The purpose of insurance is to protect against something.  Own a car?  Great.  Buy insurance in case you wreck it or run over a kid on a bike.  (Note:  Try not to run over any kids riding bikes.)  Don’t buy insurance because the policy promises a free car wash every month.

Own a house?  Super.  Buy insurance in case a tree falls through the roof.  Don’t buy insurance because the policy promises the company will paint your house every two years.

Are you alive?  Fantastic.  Buy insurance in case you die.  Don’t buy insurance because the policy promises you can use it for tax-free savings.

Simple is typically best.  The more complex something becomes the worse it tends to be.

All the rusted signs we ignore throughout our lives.  Choosing the shiny ones instead.

Pearl Jam – “Thumbing My Way”

Here comes that humanity again.  We’re distracted.  We’re excitable.  We want to believe.  Why have auto insurance when we can have auto insurance with a free car wash?  Why have homeowner’s insurance when we can have homeowner’s insurance with a free paint job?  Why have life insurance when we can pay more and invest?

Rather than buying simple, basic, cost-effective term life insurance many people were convinced to buy the product du jour from the product-pushing insurance industry.  While their army of used car salesman agents sold to advised clients that universal life was the way to go it was the agents (and their fat commissions) and insurance companies (and their intake of ever-rising premiums) that won. Who lost? The consumer.

Caveat emptor.