InsuredPlay: Inspired or Insidious?

[SS] “Absolutely brilliant!” Stan the Stat exclaimed as he looked up from surfing the web on his iPhone. “This new company called InsuredPlay1 has figured out a new way to mint money.”

[RR] “How’s that?” Rodney the Rock responded.

[SS] “They’re selling insurance on bad beats in online poker games! And just like any actuarial company, they’re charging you for the privilege. But unlike most insurance companies, they have almost absolutely minimal risk that something can go wrong. Unless their buyers or the poker sites cheat, they’ve got a guaranteed profit.”

[RR] “How does it work?”

[SS] “Say you’re all-in on the turn and your opponent has nine outs to beat you for a $100 pot. 19.57% of the time you’ll take a bad beat and lose the pot. With InsuredPlay running, you’d automatically buy a $19.57 insurance policy. If you win the hand, you lose your $19.57 but win the pot. But if your opponent hits his card, then you get $100 from InsuredPlay!”

[RR] “That sounds fair. This reduces your variance and might help keep you from tilting. What’s the catch?”

[SS] “They charge a fee of 1.49% of the pot,2 so that $19.57 policy costs $21.06. That’s actually a markup of 7.6% on the premium in this case!”

[RR] “Minting money, indeed. And the customer list will be worth a small fortune.”

[SS] “Yep, they’re insuring themselves from one kind of bad beat and ensuring another.”3

{Addendum: InsuredPlay shut down in August 2013 after sixteen months of existence.}


  1. The company was beta testing and rolled out bad beat insurance for cash games last year. They added tournament bubble insurance in January.
  2. If you play a ton of hands, the rate can go down to 0.25%, but you really need to play a lot because only hands where you’re all-in before the river count, and only pots bigger than 100 big blinds count fully. You need over 50 of these in a rolling window of thirty days just to lower your rate to 0.99% of the pot size. If you’re experiencing 50 bad beats per month, you have so much experience with them that they shouldn’t bother you in the slightest.
  3. InsuredPlay does mitigate risk if you’re playing above what your bankroll properly supports. That’s a topic for another day.

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