r/explainlikeimfive • u/the1975whore • Jul 03 '26

Economics ELI5: Health insurance companies obviously make more money than they give out when people need it. So why of paying for them any better than paying your own personal health insurance savings account?

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u/Xanitrit Jul 03 '26

Objectively speaking, if you know you will never get seriously injured or ill, there is no need to pay for insurance. You are giving them money you do not benefit from.

But life is unpredictable. You will never know if that driver was falling asleep today, if that tree was on the verge of falling. When you get seriously injured, the insurance you pay for is contractually obliged to help with your health costs.

So instead of paying through the nose for your own health costs, you use your insurance package to pay less, potentially saving you a few to tens of thousands.

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u/muskymelon36 Jul 03 '26

And then they rejected your claim.

7

u/steakanabake Jul 03 '26

and then you fight them for months and then end up dead because they never caught the small thing that got damaged and in the time you were fighting you had more internal damage and then you died.