Medical insurance, especially evacuation to a trusted facility, makes some sense to me. You have to understand the details about pre-existing conditions, though.

I am going to take a different view of trip cancellation insurance. For an upcoming trip to Europe, my non-refundable expenses will be about $15,000 (one very expensive package, train tickets, prepaid hotels). A fairly basic insurance plan is $1k. So about 7% of the amount they would pay if I had to cancel. Obviously the insurance covers a bunch of extremely unlikely events but family illness is by far the most common.

Is that a good value? I'm not so sure. The insurance company has actuaries that know selling insurance like that makes financial sense for them. If they are pretty much guaranteed to come out ahead in the long run, the chances are pretty good that most individuals won't.

To me, insurance should cover expenses I cannot reasonably afford - that's where the medical evacuation coverage makes sense. If I can afford to spend $15k on a vacation, it would be very unfortunate if something happened and I lost that money, but I obviously have it to lose. Same principal as buying an extended warranty on my TV: in the unlikely event it breaks I can afford to replace it if I want to.


Feel free to explain to me where I am wrong.