Insurance is defined as “A financial risk management tool in which the insured transfers the risk of potential financial loss to the insurance company…in exchange for monetary compensation known as the premium.” Nobel Prize winner Daniel Kahneman sums up the purpose of insurance by stating that it can be thought of as “a choice between…
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Extended Warranties Rarely Pay Off: Put the Odds in Your Favor with a Self-Insurance Fund Instead
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•In my last post I mentioned that extended warranties are one of the worst types of insurance you can buy. The odds are heavily against the purchase of extended warranties working out in your favor. In spite of this many people swear by them and purchase them every time they are offered. Why is this?…