Why insurance matters (and how to think about it) Insurance is risk transfer. You pay a predictable cost (premium) to transfer unpredictable, potentially catastrophic financial losses to an insurer. The goal is not to avoid all risk (that’s impossible) but to make risks manageable. Three principles to keep in mind: Before buying any policy, ask: Health Insurance Health coverage is often the most complicated because of plan types, networks, provider rules, and government programs. Medical bills are a leading cause of financial distress, so getting health insurance right is crucial. Main types of health coverage in the U.S. Key terms…