You never know when you’ll go

A news story some years ago told of a speculator who made a deal with an elderly woman who needed money. In exchange for her making him the heir to her house, he agreed to pay her a fixed sum every month as long as she lived. However, this one-to-one deal did not work out as planned because she lived far longer than anyone expected and the speculator died before she did. An insurance company not only has the advantage of large numbers, it has the further advantage that its existence is not limited to the human lifespan.

Sowell, Thomas, Basic Economics: A Citizen’s Guide to the Economy (Basic Books, 2004) p.205

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