Croc-insurance for Obama
I was reading this most random story about president Barack Obama receiving an insurance policy in the event of a crocodile attack as he travels to Darwin in the Northern Territories of Australia. President Barack Obama's family will receive a $50,000 benefit if the most powerful man on planet Earth gets eaten by crocodile. How comforting is this! The man is probably insured for millions in the event of death. But they will get an extra 50K for a crocodile attack.
The article added that "the policy was designed to give Mr Obama's family peace of mind." An official said: "For Michelle and the kids they can be comforted if a terrible event did occur then $50,000 would be payed out by TIO to help support them."
Here is my question: how do $50,000 give you peace of mind when you lose a husband? I don't know about you, but I would have peace of mind up until the moment some random insurance company tells me I could be eaten by a crocodile. Then I would think about the crocodile more than ever before. Isn't it what a lot of sales people do anyway... First tell you what you need to fear, whether it's true or false, and then sell you what you need to get rid of the fear.
And here is my answer: it is likely that Michelle Obama might now think of crocodiles more often than when she didn't know they could eat her husband. How ironic!
If only the risk was real... but there is another kick in the article: "But as Mr Obama is not expected to get close to any wild crocodiles on his visit, Mr Henderson says he is pretty sure the Obama family will not have cause to cash it in."
So first, Michelle Obama is told her husband might be eaten by a croc, and then Mr Henderson, the insurance guy, says it is very unlikely it will ever happen. So why did he talk about crocodiles in the first place except for publicity purpose? Obama is probably more likely to die by trying Vegemite than by being eaten by a crocodile. So again, this doesn't make any sense. It looks like Mr Henderson doesn't understand the principles of insurance.
When taking personal insurance, here are a few questions to consider:
- Is the risk actually real?
- What is the likelihood of getting the benefit if the event happens?
- Will the adverse event affect me financially?
Because of a 'not really' answer to the last question and a 'very unlikely' answer to the previous, I have stopped taking insurance on most products and services such as travels. My take is that in the long run, I am better off saving up the insurance costs, even if occasionally I might suffer a financial loss. This is what I call 'self-insurance'. You can even do it physically, and transfer money on a separate bank account every time you don't take insurance. Just consider that for small insurance amounts, you can sometimes pay 50% of the premium for commissions, administrative costs, and corporate profits.
To come back to President Obama, I reckon the insurance company should provide a policy against spiders, deadly snakes, and sharks. This will really give Michelle peace of mind while her husband hangs out down under.
The article added that "the policy was designed to give Mr Obama's family peace of mind." An official said: "For Michelle and the kids they can be comforted if a terrible event did occur then $50,000 would be payed out by TIO to help support them."
Here is my question: how do $50,000 give you peace of mind when you lose a husband? I don't know about you, but I would have peace of mind up until the moment some random insurance company tells me I could be eaten by a crocodile. Then I would think about the crocodile more than ever before. Isn't it what a lot of sales people do anyway... First tell you what you need to fear, whether it's true or false, and then sell you what you need to get rid of the fear.
And here is my answer: it is likely that Michelle Obama might now think of crocodiles more often than when she didn't know they could eat her husband. How ironic!
If only the risk was real... but there is another kick in the article: "But as Mr Obama is not expected to get close to any wild crocodiles on his visit, Mr Henderson says he is pretty sure the Obama family will not have cause to cash it in."
So first, Michelle Obama is told her husband might be eaten by a croc, and then Mr Henderson, the insurance guy, says it is very unlikely it will ever happen. So why did he talk about crocodiles in the first place except for publicity purpose? Obama is probably more likely to die by trying Vegemite than by being eaten by a crocodile. So again, this doesn't make any sense. It looks like Mr Henderson doesn't understand the principles of insurance.
When taking personal insurance, here are a few questions to consider:
- Is the risk actually real?
- What is the likelihood of getting the benefit if the event happens?
- Will the adverse event affect me financially?
Because of a 'not really' answer to the last question and a 'very unlikely' answer to the previous, I have stopped taking insurance on most products and services such as travels. My take is that in the long run, I am better off saving up the insurance costs, even if occasionally I might suffer a financial loss. This is what I call 'self-insurance'. You can even do it physically, and transfer money on a separate bank account every time you don't take insurance. Just consider that for small insurance amounts, you can sometimes pay 50% of the premium for commissions, administrative costs, and corporate profits.
To come back to President Obama, I reckon the insurance company should provide a policy against spiders, deadly snakes, and sharks. This will really give Michelle peace of mind while her husband hangs out down under.
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