&gt;  So if they&#x27;re adjusting premiums such that they&#x27;re net positive on every single account, does that mean they&#x27;ll refund your money if you end the contract without ever having made a claim?<p>No, because you&#x27;re paying for the peace of mind that comes with knowing that your worst-case scenario has been mitigated, <i>on the off-chance it happens</i>. Even if there is no disaster, you still benefited from not having to worry about it as much (knowing that the insurer would cover some portion of it).<p>Let&#x27;s play a game: you&#x27;re allowed to flip a coin ten times, and I will pay you $1 for each time it comes up heads[0]. Your expected value is $5, but you could make as much as $10 or as little as $0.<p>Someone else comes up to you and offers to pay you a guaranteed minimum of $2 at the end of the game. In exchange, you have to pay him $.25 every time you flip the coin, regardless of whether it comes up heads or tails.<p>In expectation, you&#x27;re going to come out <i>behind</i>, but this game tightens the variance on your outcome. The worst case is that you lose $.50 (you pay the insurer ten quarters, flip ten tails, and receive $2 from the insurer). The best case is that you receive $7.50 (you pay the insurer ten quarters, flip ten heads, and receive $10 from me). The expected outcome is lower, but the range of possible outcomes is $8, not $10.<p>In the real world, you&#x27;re insuring against money being <i>taken</i> from you, but mathematically it&#x27;s the same, and I find it&#x27;s easier to explain it this way. Most people have a more intuitive sense of earning money than losing it. Go figure - psychology is weird.<p>[0] One notable difference here is that the distribution of coin flips is approximately normal (binomial), whereas most insured events have a very long tail, with a mode of 0.