
Episode 199: A Game of Risk
Words & Numbers
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The Cost of Insurance
Insurance is a mechanism by which I can be compensated an amount that is way higher than what I paid in. For example, add up how much you paid an insurance over those 20 years. Over the course of 20 years, what is that? Like $30,000. But if the house burns down, the insurance company will pay several hundred thousands of dollars far more than whatI paid in. How is that possible? Because of people who paid in and never made a claim. That's what insurance is.
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