"Attorney general seeks death penalty for Luigi Mangione."
(media.scored.co)
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Why would you buy insurance for a $3000 max payout? Just put the money in an investment account and even if you get unlucky several times you can weather it. This is a strawman example.
A real example is more like a 100-sided die you roll once a year and if you get 1 then you're completely wiped out. Financially ruined and have to live under a bridge. This is what real insurance is for, unpredictable events that will seriously impact your life that you can't just save for.
Mathematically you could say that insurance should be 1% of your wealth, but that's the cost to insure not the value to the insured. If your choice is either have a 1% risk of catastrophic loss or 2% for the insurance what would you actually do? You'd pay the 2%. Ask yourselves honestly how much you would pay to avoid a 1% risk of total loss of everything you have. That difference is the value you place on the service of eliminating the risk.
If you think the insurance should be priced at the cost to insure rather than the value to the insured then you must consider eliminating risk to be of zero value. If that truly has no value to you then you wouldn't ever buy any insurance even at cost to insure. I doubt you'll go through your whole life and never buy insurance for anything, so clearly you don't actually believe the ideas you espouse.
You don't understand math at all do you?
The expectation value of an event is the probability of that event times the signed reward of that event. V = P*R
The insurance company knows the real probabilities of events because they have the empirical data. The will not price the insurance at a level below the expected payout for any given event. The 2% you keep mentioning is therefore just as catastrophic to you as the event itself. If you cannot pay for something happening one time, then you cannot pay for the equivalent happening twice.
The only time insurance makes sense is when you rig the game against the insurance company by hiding information from them.
So you think losing 2% of your wealth per year is the same catastrophe as losing all of it maybe once in your lifetime? You should just admit you're wrong rather than this bizarre display.
I gave your some credit as maybe an idealistic youth, but this is just retarded.