I guess the main purpose of insurance products, no matter what the kind of insurance may be (life insurance or insurance from accidents for instance) is to keep us calm. From the perspective of economic rationality, insurance if not always then at least very frequently is not necessarily beneficial, and sooner brings in losses than gains. To demonstrate this for instance. Imagine yourself being asked whether 2% is the probability. I am more than just sure that the response will be a definitive no in most cases. The answer is apparently correct as indeed a 2% chance is really minute and at times is being just ignored when we deal with some of the choices even without the awareness that we do so. Imagine that some potential occurrence might threaten your wealth. The chance is again 2% and you're again asked the same question. Will the answer differ? Of course, the result will depend on the extent of severity of the potential losses. The difference in the losses between 10 dollars and 10000 dollars you will treat way more different. But still, regardless what the sum of the loss is, you will take the probability much more seriously than if it was only hypothetical. Hence the loss-aversion will impose the feeling to protect your wealth and what is the best way to prevent a bad outcome 100% if not to buy insurance? So, I am leading towards that we pay in such cases, in the first place, to separate ourselves from the apprehensive premonitions, independently whether the decision is rational or not. Of course, in here, I am not disputing the importance of necessary insurance like social national ones, or at work where employers are forced to do so, because conditions of the jobs might be harmful to the heath and safety of the employees. I am talking about private insurance, which are so strongly represented in adds and basically live off the money earned out of the wrong decisions of their clients.