Help Please: Similarities between Lottery & Insurance: my last post for 2008Prev TopicNext Topic

• guesser

  

  United States
  Member #41,382
  June 16, 2006
  1,969 Posts
  Offline
  Sep 26, 2008, 1:59 am

  ▲▼
  In response to KY Floyd

  Quote: Originally posted by KY Floyd on Sep 25, 2008

  One similarity is that you should always expect to pay more than you collect, and make your purchase decisions accordingly. Spending an extra $100 per year to reduce a collision deductible by $500 is a bad idea unless you absolutely can't afford to pay the extra $500 at once in the unlikely event that you have an accident. Spending money on the lottery is a bad idea if you can't afford to pay the extra $500 in the unlikely event that you have an accident.

  YOU may pay more than you collect, as will MOST of us (we hope), BUT, if we are ever hit by a drunk driver, if they are insured, we will collect far more than we pay in.  And I pray we never have to test that, but I have a co-worker in a wheel chair the rest of his life because of a drunk driver.

  So, with a lottery, all of us that play pay in, but only 1 or 2 tickets will collect.

  And with Insurance, we all pay in, and only a few of us will collect more than we pay in, and I'm OK with that.

   

  And I also know that when I die, my family will collect far FAR more than I have paid in for in life insurance premiums.
• Stack47

  

  Kentucky
  United States
  Member #32,651
  February 14, 2006
  10,301 Posts
  Offline
  Sep 26, 2008, 6:16 pm

  ▲▼

  The Martingale betting system is a form of an insurance policy because if you have unlimited funds and house has no limit, you'll always show a profit. However it only works on even money bets and I can't find one in any lottery.

  Go to a roulette wheel and bet $1 on red, if black hits, make a $2 bet on red then double your bet again $4, $8, $16, etc. until red finally hits. Take a look at your profit after "winning" on $32 bet; you lost $1 + $2 + $4 + $8 + $16 or $31 on the five bets and won $32 on the last bet for a spectacular profit of 1 whole dollar. Even if you used a 50/50 bet like first digit high or last digit low in a pick-3 game, you couldn't use the Martingale system because the game only pays off at 50 cents on the dollar.

  Life insurance policies are an individual selected amounts by a person and to determine the "profit", you must subtract the premiums. There are progressive betting methods used in pick-3 games where players raise their bets to make a predetermined profit. I suppose you could compare it to a life insurance policy if after a few years of paying premiums on one $10,000 policy, you add another policy and pay the added premiums on it to get the intended "profit".

  The difference even with lower odds pick-3 games, we can assume any three digit straight combo will be drawn in "time", we don't know how long that "time" will be so if the intended profit was $1000, you may have to invest $10,000 to get it. In 1988 I might have noticed the straight combination 023 hadn't hit in four years in Ohio and tried to make a $1000 profit playing it on the assumption it will eventually be drawn. My assumption would have been correct, but the problem is it took another 20 years before it was drawn.

  If a pick-3 game is played twice a day, seven days a week, it will take 16.6 months for 1000 drawings and 023 never showed in 18 straight of those 1000 drawing cycles. It was actually less because Ohio had only one drawing a day, only 6 days a week for many years so but it's still more than 10 drawing cycles.

  One Mega Million cycle is 175 million drawings and if he played the day he was born and every drawing after, the world's oldest man only would only see 0.00067% of the cycle. The profit even if he won at the lowest jackpot would be well worth his $11,752 investment but I can't see how anybody could assume their numbers would hit in that tiny percentage of one cycle (even if the become the world's oldest man or woman).

  Pumpi, why try to use the lottery as an insurance policy when you can simply buy insurance?
• pumpi76

  

  Honduras
  Member #20,981
  August 29, 2005
  4,715 Posts
  Offline
  Sep 26, 2008, 9:41 pm

  ▲▼
  In response to Stack47

  Quote: Originally posted by Stack47 on Sep 26, 2008

  The Martingale betting system is a form of an insurance policy because if you have unlimited funds and house has no limit, you'll always show a profit. However it only works on even money bets and I can't find one in any lottery.

  Go to a roulette wheel and bet $1 on red, if black hits, make a $2 bet on red then double your bet again $4, $8, $16, etc. until red finally hits. Take a look at your profit after "winning" on $32 bet; you lost $1 + $2 + $4 + $8 + $16 or $31 on the five bets and won $32 on the last bet for a spectacular profit of 1 whole dollar. Even if you used a 50/50 bet like first digit high or last digit low in a pick-3 game, you couldn't use the Martingale system because the game only pays off at 50 cents on the dollar.

  Life insurance policies are an individual selected amounts by a person and to determine the "profit", you must subtract the premiums. There are progressive betting methods used in pick-3 games where players raise their bets to make a predetermined profit. I suppose you could compare it to a life insurance policy if after a few years of paying premiums on one $10,000 policy, you add another policy and pay the added premiums on it to get the intended "profit".

  The difference even with lower odds pick-3 games, we can assume any three digit straight combo will be drawn in "time", we don't know how long that "time" will be so if the intended profit was $1000, you may have to invest $10,000 to get it. In 1988 I might have noticed the straight combination 023 hadn't hit in four years in Ohio and tried to make a $1000 profit playing it on the assumption it will eventually be drawn. My assumption would have been correct, but the problem is it took another 20 years before it was drawn.

  If a pick-3 game is played twice a day, seven days a week, it will take 16.6 months for 1000 drawings and 023 never showed in 18 straight of those 1000 drawing cycles. It was actually less because Ohio had only one drawing a day, only 6 days a week for many years so but it's still more than 10 drawing cycles.

  One Mega Million cycle is 175 million drawings and if he played the day he was born and every drawing after, the world's oldest man only would only see 0.00067% of the cycle. The profit even if he won at the lowest jackpot would be well worth his $11,752 investment but I can't see how anybody could assume their numbers would hit in that tiny percentage of one cycle (even if the become the world's oldest man or woman).

  Pumpi, why try to use the lottery as an insurance policy when you can simply buy insurance?

  why try to use the lottery as an insurance policy when you can simply buy insurance?

  Well i wanted to know how the lottery could be like life insurance but what i had in mind is to make the lottery be like retirement...People work all their lives and the majority retire with less than 100,000 dollars i bet...I was wondering how could we make one person sort of put money like life insurace (the tickets playing) and then after 20 or 30 years of playing could retired with let's say 1 million dollars guaranteed, just like the life insurance...

  when i say lottery i mean a pyramid system after all the lottery is like a pyramid, lots of people put money to make 1 person rich..That's what a lottery is...

  The Forex trades: 1.6 Trillion dollars EVERY day, that´s more than the GDP of the Carribbean Central America, COMBINED. Enough to feed every crook out there for centuries...To all Geniuses & Powers Countries of the World the Planet needs breakthroughs in all Medicine, Veterinary, Biology related fields, Psychology, Population Psychology/Sociology..They need to genetically ingeneer new plants species/types to give more variety of plants and thus have more resources for combating diseases¨

  
  

   
  

  
  

   
  

  
  

   
  

   
  

  
  
• pcnut

  

  Myrtle Beach, SC
  United States
  Member #18,456
  July 12, 2005
  3,536 Posts
  Offline
  Sep 26, 2008, 10:32 pm

  ▲▼

  Hi pumpi76

  Are you speaking of, relationship between risk-attitudes towards lotteries and insurance preferences?

  Put this quote in Google Search. There is some topics on this: "What are the similarities between the lottery and insurance"

  pcnut

  "Wisdom is knowing what to do next, skill is knowing how to do it, and virtue is doing it."

                                                                                             David Starr Jordan

  "If you embrace tenacity within your life, the end result will be your success."  

                                                                                                               Charles Byrd Rhue

  Enjoy

  pcnut
• pumpi76

  

  Honduras
  Member #20,981
  August 29, 2005
  4,715 Posts
  Offline
  Sep 26, 2008, 10:58 pm

  ▲▼
  In response to pcnut

  Quote: Originally posted by pcnut on Sep 26, 2008

  Hi pumpi76

  Are you speaking of, relationship between risk-attitudes towards lotteries and insurance preferences?

  Put this quote in Google Search. There is some topics on this: "What are the similarities between the lottery and insurance"

  pcnut

  thanks a lot people i got it now...Thanks a lot...

  The Forex trades: 1.6 Trillion dollars EVERY day, that´s more than the GDP of the Carribbean Central America, COMBINED. Enough to feed every crook out there for centuries...To all Geniuses & Powers Countries of the World the Planet needs breakthroughs in all Medicine, Veterinary, Biology related fields, Psychology, Population Psychology/Sociology..They need to genetically ingeneer new plants species/types to give more variety of plants and thus have more resources for combating diseases¨