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The debate about how the underwriters need to make their money is a tired one, but something that I think doesn’t get mentioned often enough is that with virtually any kind of insurance product, a massive portion of the premium gets sucked up by fraud, or the effort to prevent it. If you are an honest person, that is a tax your are paying. So it isn’t just about the requirement of profit of the administrator that sets you back, it’s also the fraud overhead you choose to pay by joining that risk pool.
Traditionally (like in our grandparents’ era), one generally wouldn’t choose to pay that tax unless it was to defend against a financially ruinous outcome (health, natural disaster, unemployment, etc).
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