To insure or not to insure?

One of the biggest responses I get when I ask the question "Why insure?" is for peace of mind. I personally don't get peace of mind from insurance. Firstly, you can't be sure that the insurer will be solvent at the very time you might need them for a big payout. Secondly, if your cash flow is poor, the very money you spend on insurance can be a drain that could harm your financial security. The returns on investment as far as insurance goes are poor, especially if you have morals and are a lower than average risk of claims. I always get the feeling that the greater part of my premium goes to those with clever but fraudulent or weasel claims, and for the rest of us it is a false peace of mind.

With this in mind, I am happy that Australia is one of the only developed countries in the world that doesn't explicitly insure deposits. Deposit insurance, like other insurance is definitely a false peace of mind. The only insurance for investments like deposits, shares, bonds, property, employee training, love, children the list goes on... is to have a balanced portfolio of investments as well as some cash under the bed etc. Remember the balance!