I just found this alarming article

[ShadowHM]

Exactly the scheme I use.  Put tons of money away.  I own shares in a number of insurance companies (NZ and AUS) and from their balance sheets they pay out each year approximately 50% of what they take in in insurance premiums.
NOTE:  This does not mean that the 'average' person will get back 50% of what they pay in, the 'average' person will get a great deal less, as the payout distribution has a long tail.
Having insurance is a waste.  Most people will argue against this by pointing out the worst case scenario for a person without insurance.  This is obviously a failure of either statistics or perspective.  With the amount of insurance some people have I'm surprised they even venture out of their house.  Oh well, good for those of us with a finger in the pie.

Hmmm why don't I start up my own casino and insurance company?  They sell exactly the same thing... idiot tax  :P
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An idiot tax? I don't think so. :P Purchasing insurance, if undertaken with an eye to risk/reward ratios, can be a perfectly reasonable thing to do.

And, for this discussion, let us take the health insurance right out of the picture, as that particular individual out of pocket expense is applicable to neither of us. You may be at a stage of life where you do not need insurance of any kind. However, there are many forms of insurance, and many stages of life.

I insure my car. I pay for collision insurance, as I am legally obligated to do. I also pay for insurance for replacement of the car, if I manage to total it. However, I have a high deductible. This means that I pay for the fender-bender type of accidental damage on my own. But if the car gets totalled, I don't have to pay for a brand new one from my savings, possibly at a time when I have other obligations.

I insure my home. Again, I have a high deductible, but if the damn thing burns down, I will not have to replace it out of my savings - which I expect to live off in a few years rather than live in them.

I insure my life. I have carried various levels of this insurance over the years. Right now, the amount is just about enough to pay for a nanny for a few years until the children no longer need a person at home to care for them. However, I will likely be keeping some form of insurance for another reason - estate planning. I have been and continue to raise my children with the notion that they will be self-sufficient, but there is one thing I firmly intend to pass to them intact on my death, and that is the family cottage. Insurance is a tool to ensure that can happen and that they will not have to sell the thing to pay my last tax bill.

We insure my husband's income, in a limited way. He is self-employed and I am his sole employee. If he gets sick for an extended period of time, we are broke. His business overhead costs are insured; after a one month illness they will be paid by the insurance company. If he becomes disabled and unable to work, his income flow will be replaced.

I have made my insurance purchases after reflecting about my individual tolerances for risk. I do not insure my jewelry. I do not insure my children's lives. I don't insure my toys. I pay for insurance on the things that I feel I genuinely need, and I make sure the premiums are low by keeping trivial costs out of the equation. Putting 'tons of money' aside is not going to save me from a catastrophic loss, and that is what I pay for insurance for. I still put as much money aside as I can, because I damn well know I am going to have to live off something in my old age.