Pooling risk

Risk pooling is the foundation of insurance. Your health insurance premium subsidizes the costs when someone else gets sick, and other people’s premiums, in turn, subsidize your costs when you get sick. The more people who share that risk, the less each individual needs to pay into the pool.Risk pooling is the foundation of insurance. Your health insurance premium subsidizes the costs when someone else gets sick, and other people’s premiums, in turn, subsidize your costs when you get sick. The more people who share that risk, the less each individual needs to pay into the pool.