Is Insurance Hard to Understand?

As a guy who made his living working for these "blood suckers" I am always amazed how everyone outside the insurance industry has the answers as to what's wrong with it. Simplistic answers, it's true, but answers that play well with the public. Mechanically, insurance is a simple mechanism with only one variable that ALL the companies, either Life or Health have to keep in mind when developing a product for the public and that variable is THE PUBLIC. The public is predictable-When they are well, they don't want to pay for insurance but instead they want to see the latest movie, buy a big screen or maybe just take an expensive vacation;Anything but pay those blood-sucking insurance companies for that cheesy sheet of paper that doesn't entertain us, amuse us or even feed us tasty food. After my 40+ years of experience, this group tends to be the young, the healthy and the carefree.
Now, the second group which tends to start at about age 45 are those folks that begin to find they don't feel as good as they used to and that along with other more obvious signs that the ole body is not what it used to be, are more than willing to begin to buy and pay for insurance, the more the better. We've found that over the years, people actually want to use life insurance to create an estate for their children to replace the monies that they should have saved and didn't when they were younger.
Now, here's the simple part. The insurance company is usually either a stock company (owned by their investors) or a mutual company (owned by it's policyholders). There a few other types but are insignificant in size or influence. In either of the two major type companies, there are managers. Their jobs are to make sure that they have more income than outgo. If they get mixed up and their outflo is greater than income, over time the management is replaced.
It is no trick to pay claims but the trick for every company is to entice the young, and presumably healthy lives to remain as policyholders in enough numbers to off-set people like me who not only are older but are almost guaranteed to have health or life claims, sooner or later, probably sooner.
I've often thought that part of the compensation that employees in the insurance companies receive should be called "defamation pay". They are universally cursed and rediculed and come out just above lawyers and used car salesmen in polls of the worst professions in the US.
One more item for you to ponder; Why do you think major corporations pay fees to insurance companies to "administer" their benefit plans, even though the major corporation is actually the insuror of the group. Here's the secret: The insurance company who is employed to keep the bad risks out (and keep the group plan solvent) steps in as the surrogate BAD GUY and takes the shots that would otherwise be directed toward the employer.

Just kidding about being a blood sucker industry. We're pretty good guys; Just ask an widow or someone coming out of the hospital with 80, 90, or even 100% of their treatment covered.