Posted on 03/30/2002 7:53:37 PM PST by malakhi
| Statesmen may plan and speculate for liberty, but it is religion and morality alone which can establish the principles upon which freedom can securely stand. The only foundation of a free constitution is pure virtue. - John Adams |
Yeah, me. (at least until I decide how I feel about gambling :'). Does Eddie have to know though? He tells me it's my money and to do what I want with it, but he really doesn't mean it.
Not around here. I've told this before but not to you. Awhile back I was looking for shirts for my son. I only wanted American made. The clerk brought out shirts from all over the world but could not find one made in the USA. She kept looking and finally found one. She proudly brought me a button up with big plaids. So ugly that even Al Bundy wouldn't wear it.
One would think an adult would not require an explanation of the gambling nature of life insurance.
You are betting that you will die.
The company is betting that you will not.
Is that simple enough?
As further clarification, yes, the company knows you will die. They are, technically, betting that you will pay enough premium payments, over the years, to allow them to invest the money and easily make the face value of the policy payment when you die, plus a profit.
You, technically, are betting that you will die before making enough payments to the company. Because otherwise, you could have invested the money yourself and made the profit all to yourself, to enjoy even before dying.
So, both in the nature of the relationship between insured ans insurer and in your decision to pay monthly to a company rather than to your own private investments, you are making gambles about what the future holds.
SD
Is this really so hard to understand? Suppose you buy a $500,000 20 year term life policy. The annual premium is $330.00. Assume that the premium is fixed throughout the life of the policy, and you don't convert it to whole life or to a permanent policy. You are in effect making a wager with the insurance company over your own mortality. If you are alive at the end of the 20 year term, you have nothing to show for it, and have lost your "ante". If you die at any time during the 20 year term, your beneficiary collects $500,000.
The insurance company has very smart mathematicians doing actuarial analysis to ensure that the "house" has the odds in their favor. Now, the amount you "wager" is $330 x 20 = $6,600. But you also need to include the opportunity cost of investing that money in some other way over the course of 20 years. The 20 year value on this investment could easily be $20,000+. The insurance company should be able to get at least the same amount of return on what you pay to them. To break even, on all comparable policies the company must have claims of no more than around 4% of insureds.
So in sum, you are wagering $20,000 with 4% odds of you (or, more accurately, your beneficiary) "winning". Sounds like a "gamble" to me.
I don't think "Satirewire" is publicly traded. ;o)
Your example of "life insurance" is simply a very bad example. Why not try another one instead.
It is not a bad example, it is a perfect example. Do you deny that their is a gamble inherent in life insurance?
Ultimately, this comes down to the fact that the term gambling is being used in, at least, two different ways in this discussion.
The more general definition of gambling is simply that of taking a risk. It can be effectively argued, I believe, that Christian living would not exclude all such risk.
A more narrow definition of gambling has to do with gaming (i.e. where you stake resource and obtain a return, either positive or negative, from the results of a game). It is likely that, such activity, which could be characterized as ... playing with your money ... could be considered wasteful and, therefore, would not be an example of good Christian stewardship.
Sure it is. If I buy 1,000 bushels of wheat, and there is no drought, I can sell the wheat or use it myself. If I buy $500,000 term life, and I don't die, I have lost my "investment" entirely. I cannot get the money back, and the expired policy has no resale value. (Well, if you are famous you might be able to get a few bucks for your signature on eBay).
Unless the Lord tarries, death is a garauntee.
The company is betting that you will not.
The company is betting that they can make enough solid profittable investments to cover the death benfit payout before you die.
Now it is indisputable. You either do not read, or can not comprehend what I say. I made these exact points in my post, after giving you this simple overview of the reality of the situation.
Since you are unserious about engaging in these ideas, I shall cease.
SD
SD
Yes, but the exact date and time of death is unknown.
The company is betting that they can make enough solid profittable investments to cover the death benfit payout before you die.
Not exactly. That is true for permanent life policies, but not for term life. The company "groups" term policies. If they know statistically that 96% of 30 year olds will live to age 50, then they know that they will only need to pay out on 4% of claims. So they only need to collect enough in premiums to cover this 4%, plus profit. That's why term life is so cheap compared to other life insurance products. Its cheap because the probability of a payout is small.
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