Heaven as a Moral Hazard

I StumbledUpon this image of a man unicycling across two cliffs at Wellingtongrey.net and it reminded me of my insurance exams.

Image of man unicycling across two cliffs with sharks below.
Heaven: oversell it and it becomes a moral hazard.

As some of you may know, I’ve been taking insurance exams conducted by the SCI (Singapore College of Insurance) in order to hold the qualifications to be a licensed financial adviser representative; and, as some of you may know, I’m probably not going to be a financial adviser representative any time soon (yes, I’ve gotten another job).

The exams themselves have cost me close to a total of $400: a relatively large sum of money especially for someone like me who hasn’t started working. But do I feel a sense of despair and foolishness for plonking down this amount for something I will not use? Absolutely not. Fact is, I do use the knowledge that I have gleamed from studying for these exams (albeit not professionally). Take for example the image of the unicyclist. This image of reckless self-endangerment would have, on a good day, previously provided me a smile but nothing more. However, today it set off an aha! in my head, and I laughed out loud (loled). I understood the image on a different level. Why?

Well, after looking at the image it suddenly dawned on me how a belief in God was a form of insurance. Premiums are paid weekly, through visits to the church attending mass and so on. Depending on your level of devoutness, you’ll receive different benefits from this religious policy.

The more devout pay higher premiums (pray more regularly, or preach the word of the Lord), and thus get higher payouts in times of need (lost something? pray and rejoice! break a limb? pray and rejoice! lose a loved one? pray and rejoice!) The less devout pay lower premiums, but in times of need may suddenly find themselves lacking faith; if something bad happens to these people, the probability that religion will be the one to tide them over this tough time is considerably smaller — they may, in fact, sink into despair, because of a lack of faith.

But for both sets of devotees (whether more or less devout), both will go to Heaven, which is the ultimate payoff — although in this case it’s a lump sum benefit given to the self-insured, and not his or her dependents. For the most devout, it’s like a whole-life policy with all the riders attached. For the less devout, it’s like a simple term-life insurance without the riders (where the policy ends where the faith stops; if you stop believing just before the moment of your death, you may have wasted all those years praying your premiums).

The problem with this is that if Heaven is so great, wouldn’t it create a strong moral hazard? A moral hazard refers to a situation arising where by an insured party is more willing to take higher risks because the insurance protects the insured from risk: the insured could well be better off if something bad were to happen than if he or she were to remain safe! Perhaps religious authorities might look into this, and ask themselves if Heaven’s been marketed wrongly. Certainly, suicide’s not condoned, but reckless self-endangerment certainly isn’t.

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