What do you think about insurances ?

[John Iverson]

Is it a scam? I have heard Leo talking scams in our society, what are the scams or what are in our society that decieves us like for example is life insurances, Financial advisor, bank, buearocracy are scam? 

Can you educate and enlighten me here

[commie]

Nutjobs may tell you otherwise but obviously insurance, banking, bureaucracy and so forth aren't scams. Why on Earth would you think otherwise?

Obviously any inadequately-regulated industry will be rife with scammers. The profit motive ensures the worst will incessantly get in your face as long as they aren't made to shut up, but their obnoxiousness doesn't mean there are many scammers in the industry or that much of its business involves scams.

[snowyowl]

@John Iverson hi, great question!  I'd agree with commie, that you can't write off whole industries like banking, insurance, financial advisers etc. But there are scammers around, so if you're thinking of using a financial service, make sure they're regulated (if you can trust regulators in your country). 

Insurance is about dealing with risk: you have risks in your life such as fires, thieves, illness, death, car accidents and so on. You can pay an insurance company to take on the financial risk, for a fee, and hopefully they will pay up if the worst happens. You can even insure yourself against living too long and running out of money - that's called an annuity. Some things you have to get insurance for, like cars (in my country), or houses if you get a mortgage. 

But otherwise, you can shoulder the risk yourself, and save up for bad events, rather than paying an insurance premium. Which is better? You decide! 

With financial advisers, I've found it better to pay a fixed fee rather than ongoing commission, and certainly make sure they're independent and not tied to any particular products. 

If you have the time and inclination, it's definitely worth educating yourself about personal finance to help you make good choices. I like the UK web forum Lemon Fool https://www.lemonfool.co.uk but I'm sure there's many others.