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I read a silly post about critical illness. That person commented that there's no need to get critical illness coverage because the probability of claiming such things are very low, to the tune of 5% during their working life. A hospitalization and surgery plan (H&S) is enough. I disagree fully with the comment that having a low probability of claim means that there is no need to cover for it. I shall not comment on whether a H&S plan is sufficient.
The comments made me wonder if people are confused with the probability and the payoffs. The consequence of an event happening are often more important than the probability of occurrence.
Let's play a very sick game of russian roulette. Inside the chamber, there are 6 slots with only 1 live bullet. If you press the barrel against your temple and squeeze the trigger, you'll immediately be given $5 million SGD if you survive. The probability of getting the bullet is 1/6 and you have 5/6 chance of getting the $5 million SGD. Would you play? Read more...