There's another factor that sometimes is in play here: tax treatment.
I used to take my employer's dental coverage. I considered the expected value to be "negative" and could easily self-insure. Yet it was a good deal anyway: I could pay the insurance cost with pre-tax dollars, but if I paid out of pocket it was with after-tax dollars.
This is also why you periodically see news things about *big* employers taking out insurance on all of their employees. No, it's not an indication they are being unsafe, but taxes. The proceeds from life insurance are tax free. The insurance company invests the money, when it's paid out that's not taxable. Done on a big enough scale the overhead costs are less than the benefit of converting taxable gains into tax free gains.
I used to take my employer's dental coverage. I considered the expected value to be "negative" and could easily self-insure. Yet it was a good deal anyway: I could pay the insurance cost with pre-tax dollars, but if I paid out of pocket it was with after-tax dollars.
This is also why you periodically see news things about *big* employers taking out insurance on all of their employees. No, it's not an indication they are being unsafe, but taxes. The proceeds from life insurance are tax free. The insurance company invests the money, when it's paid out that's not taxable. Done on a big enough scale the overhead costs are less than the benefit of converting taxable gains into tax free gains.