[scarmig]

Health insurance is a similar situation.

Once you've saved up a decent amount, it makes much more sense to go with a very high deductible plan. Sure, you might lose 10k in one year through some disaster, but on average you'll pay much less than that, such that it's cheaper to forgo insurance for everyday health expenses.

If you're poor, though, having to spend 10k out of pocket will throw you into a spiral of debt, bankruptcy, and poverty, on top of the associated health problems. Even 1k out of pocket can ruin you.

Over decades, you can reasonably expect to save tens of thousands of dollars on health insurance with a high deductible instead of a "comprehensive" plan.

[AlexeiSadeski]

It makes sense to go high deductible no matter what your income is. It costs less to pay interest and principle on your $10k disaster deductible than it does to pay $2k/year extra on low deductible health insurance.

Insurance is a tax on people who are bad at math.

[dllthomas]

This is complicated somewhat by tax law. Your company paying for the more expensive plan is paying it out of pre-tax money, whereas your deductible (up to a point) is paid out of post-tax money (unless it comes out of an FSA, but those being "use it or lose it", one should be careful not to over-fund, so they aren't a good match for paying unexpected deductibles).