&gt; The point of insurance is to pool risk.<p>The point of insurance is to <i>smooth</i> risk, not to pool it. Pooling risk is not the <i>point</i> of insurance as a product; it&#x27;s the mechanism by which that product (risk smoothing) becomes feasible as a business model.<p>&gt; Look up the term &quot;actuarially fair&quot;.<p>There&#x27;s really no need to condescend by telling me to look up basic terminology; I am quite well-versed in this topic.<p>I didn&#x27;t bring up moral hazard in this post, because it actually isn&#x27;t necessary to explain why insurance has a negative expected value (which is equivalent to the statement that premiums are always non-zero[0]). It sounds like you&#x27;re confusing a few different concepts here.<p>[0] Moral hazard is generally addressed by deductibles, not by premiums.