economics of insurance(3)

the insurance company is not gambling , because what is unpredictable and subject to chance for the individual is highly predictable and uniform in the mass. whether john C.smith,age twenty and in good health, will live for 30 more years is a matter of chance,but the famous law of large numbers guarantees that out of 100,000-odd twenty-year-old in good health,only a definite proportion will still be alive at the end of such a period.The life-insurance company can easily set a premium at which it will not lose money.Hence,the company certainly is not gambling.
What about the buyer of insurance? is he gambling?The reverse can be shown to be true;The man who does not insure his house is doing the gambling.he is risking the whole value of his house against the small premium saved.If his house dose not burn down in any year,the non insurer has won his bet;if it dose,as occasionally must happen.he loses his bet and incurs a tremendous penalty.