August 15, 2017
An expert on investor behaviour, Dr Michael Finke of Texas Tech University, warned in a recent financial literacy series that fear of losing money temps consumers to buy unnecessary insurance.
Buying a policy is "rational" only when the probability of losing money is low and the size of the potential loss is high, Dr Finke said.
"It's a good strategy to make sure that you let the small ones go so you can focus on insuring bigger losses."
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