(This article includes updates from July 22)

Lately, I've participated in many discussions in various settings about insurance. Not just insurance directly related to mortgages but insurance in general.

Actually, my long-time readers know that every fixed family expense is directly linked to the mortgage. The amount of the monthly payment significantly affects the total payments to the bank. In my lecture, I demonstrate the total cost at the level of Hundreds of thousands of shekels As a result of a thousand shekel reduction in the monthly payment:

This means that every shekel added to our fixed monthly cost for mortgage repayment will ultimately be very expensive and greatly affect the family's well-being.

Why don't we like dealing with insurance?

This article aims to address one of the family expenses we usually avoid dealing with – The insurances. I was thinking about why we don't like dealing with insurance:

1. Insurance is related, on the one hand, to promises of large sums in the event of an insured event, and on the other hand, to a relatively small monthly expense.

2. Insurance is related to our greatest fears: a child getting injured, a child getting sick, disability, death, illness. We cannot prevent these events but we are accustomed to "doing something" against dangers. This "something" is perceived by us (with the encouragement of insurance agents, of course) as taking out insurance.

3. Similar to mortgages, we don't understand much about insurance, but we trust "professionals" (banks, insurance companies, insurance agents) to be the responsible adults and recommend what we should do. Of course, these recommendations have vested interests. Mortgage advisors, as well as insurance agents, should be viewed not as advisors but as salespeople. This one-word change, which I've proposed many times on this site, helps to better understand everyone's place in the equation and leads to a better understanding of the "advice.".

Well, what do I have against insurance? Actually, nothing. I think some insurance is essential. I'm not against insurance, I'm against over-insurance. For example People think that the more money they have, the more insurance they should get. In reality, it's the complete opposite: The richer you are, the less insurance you should have. 

How do insurance companies work?

The insurance company operates using a simple method: it calculates the risk of a particular event, called an insured event, occurring. After calculating the risk of the event occurring, it estimates the average cost it will have to pay as compensation if such an event occurs.

Let's take personal accident insurance for children as an example. Under the insurance, there is a reimbursement of 5,000 NIS for a broken arm. The insurance company calculated that the risk of a child breaking their arm due to a personal accident is one in ten thousand. That is, every month, for every ten thousand insured children, one will break their arm. The cost of the insurance for the insurance company is therefore:

 1/10,000 * 5,000 = 0.5 Israeli Shekels. Personal accident insurance includes various insurance components (burn, fracture, death, etc.). For each of these insurance components, the insurance company performs a similar calculation and finally arrives, for example, at an average cost of 20 shekels.

Like any commercial company, an insurance company does not exist for charity but to achieve the maximum possible profits. Therefore, to the cost of damage calculated earlier (20 shekels), the insurance company adds an additional amount intended to cover all its costs (broker's commission, employee salaries, office maintenance costs) andprofit To its shareholders.

Examples of salary costs paid in insurance companies can be seen here:

Sample insurance company executive salaries:

• CEO of Migdal Insurance Company – In eight years of work, he received 44 million NIS. Upon his departure, he received approximately 8.5 million NIS for "non-competition.".
• Harel will pay an annual salary of NIS 10 million to its two CEOs.
• Additional information

It is important to remember that in every insurance company, in addition to the CEO, there is also a chairman, a vice-chairman, deputy CEOs, and finally, thousands of employees, all of whom are funded by insurance payments.

Insurance companies operate in a competitive market, setting insurance payouts and premiums based on market competition. The companies utilize various behavioral experts to sell their wares and to skillfully tap into our fears.

For example, Harel Wedding Insurance He rode on the couple's fear of losing the large sums of money they had invested in organizing their wedding. From observing the payment and compensation table of this insurance, one can see something fascinating:

Cancellation of a wedding due to a traffic jam, illness of a spouse, or reserve duty due to war will entitle the couple to NIS 100,000. In contrast, cancellation of a wedding due to Death One of the spouses will win the remaining spouse 25,000 ILS.

After reading the first part of the article, we should not be surprised From the absurdity where a traffic jam results in four times higher compensation than a death. Simply put: The insurance company likely calculated that death is more common than cancellation for any of the other reasons, and to meet a customer-acceptable insurance cost, it reduced compensation where the frequency is greater.

What else is worth insuring?

In my opinion, insurance should be taken out against something that would be impossible for the family to cope with. For example, maintaining a family member in a nursing home costs about 10,000 shekels a month. Most families would not be able to cope with this cost, so there is logic in long-term care insurance. For a family for whom this cost is manageable, insurance is unnecessary. Remember the rule: The more resilient you are, the less insurance you need. 

More examples:

Comprehensive car insurance

I drive a car that costs around 50,000 NIS. I know that if the car is stolen or destroyed, I can finance the purchase of a new car with monthly payments that I can afford. I do not have comprehensive car insurance. On the other hand, I do have third-party liability insurance – because if I hit a Mercedes worth 200,000 NIS, it would be difficult for me to finance the compensation.

Apartment contents insurance

The same principle as before. I know that if the contents of my apartment are damaged, I can afford to replace them. However, I would have difficulty affording to rebuild the apartment itself. Therefore, I am getting apartment insurance, but not insurance for the apartment's contents.

Health insurance

I do not provide health insurance. As a real estate investor I have several apartments. I am keeping one of them without a mortgage, and it serves as a substitute for health insurance. If, God forbid, one of my family members needs expensive treatment abroad, I will sell this apartment and fund the treatment.

Health insurance, similar to long-term care insurance described above, is individual and not family-based. There is a very slight risk that two family members will need it simultaneously, but since we don't know in advance who will need the insurance funds, we are forced to insure everyone.

In the same way, we purchase long-term care insurance concurrently with health insurance, even though if we become disabled, we will most likely not need surgeries abroad or expensive medications. Since we do not know which of the conditions (illness with medications outside the basket) or a disabled state will occur, we are forced to insure against both.

Personal accident insurance

This article was actually written following my conversations with several friends on the topic of personal accident insurance. In my opinion, this insurance is the most interesting to discuss, which is why I am dedicating a special chapter to it.

Regarding the insurance policies above, I have set clear rules that I believe will help everyone decide whether or not to take out each type of insurance. Personal accident insurance, in my opinion, Not recommended for anyone to do Therefore, this section will be broader so that I can provide justifications for this opinion. First, I will begin by sharing that my family and I are members of the community of Homeschooling In other words, parents who have decided not to send their children to school but to take responsibility for their education and homeschool them. Since our children do not attend school, they are not covered by the personal accident insurance that applies to all children in Israel, which has raised the question of whether to insure them privately. 

Before answering this question, I would like, as a good Jew, to ask another question:

Which group is larger in the UN: countries whose names start with the letter Y or countries whose names start with the letter K? Most Israelis would say there are more countries starting with Y. It’s obvious: in a second I can name countries starting with Y: Israel (ours), Jordan (right next to us), Greece (the cradle of Western civilization, annual vacation), Japan (Toyota), Yugoslavia (Petrovic, basketball). Countries starting with K? Canada …………

In practice, there are, of course, more countries in Group K. The countries we had in mind as examples of countries in Group J are All The countries in 'Y' (except for Yugoslavia, which was dissolved over a decade ago and actually became a country in 'K' - Croatia).

In contrast, the letter "K" includes 18 countries: Cuba, Canada, Kazakhstan, Kyrgyzstan, the two Koreas, the two Congos, Cyprus, Qatar, Cambodia, and others.

Another question: It’s clear to everyone that the odds of winning the lottery are low. Why does the lottery spend so much money on ads like: 'Araleh called Moti…” “Araleh called Yonit…” and so on?

The answer to both questions lies in the way our brain works; the brain interprets ease of retrieval as frequency (More examples). In other words, if it’s easy for me to think of examples (as Israelis, it’s easy for us to think of a country whose name starts with the letter 'Y”), it’s likely that these examples are more common. Similarly, if I hear about a man who won the lottery and a woman who won the lottery, I might (could) think that it is easy to win the lottery. In reality, this is not necessarily the case.

Let’s get back to personal accident insurance: Every time I say I don’t have personal accident insurance, I hear about a friend of a friend—or even the child of someone I’m talking to—who broke their arm, and as a result, the family received 2,500 NIS. My response is:

1. If someone you know has experienced this, it doesn’t make it any more or less likely to happen to you. Remember the 'Y” countries. Even though they’re easy to remember, their prevalence isn’t increasing.
2. 2,500 shekels is by no means an amount that could be considered an "economic trauma" requiring insurance. It’s nice to receive money, but it’s not nice to have a cast on a child’s arm. But There is no conflict between the two. Taking out insurance and "rejoicing" when you receive 2,500 shekels for a broken arm is like betting against the soccer team you support: if the team wins, you’ll be happy about the victory; if it loses, you’ll be happy about the money? I don’t think it’s worth paying the premium for that kind of bet or insurance. You can also look at the issue from a different angle. Let’s say I tell you that the probability (risk) of a child breaking a hand is 1 in 10,000. Would you buy a lottery ticket from me for 30 shekels a month that, with a 1 in 10,000 chance, would pay out 2,500 shekels? If I told you that my neighbor’s son won 2,500 shekels, would your answer change?
3. Please note the table of personal accident insurance benefits, taken from the Harel Insurance website (similar tables are available from all insurance companies):

 Source: Harel Insurance 

This table has a similar structure to the wedding insurance table presented above: There is no correlation between the amount of damage and the amount of compensation.

Please note, for fractures and burns you will apparently receive 10,000 shekels, even though the actual economic damage is negligible (a day in the ER or at a HMO clinic, a few markers to scribble on the cast, and the child can be sent to kindergarten and school, another day or two for check-ups). On the other hand, in the case of a severely disabled child (as mentioned, the cost of upkeep is about 10,000) In the month of), will entitle you to a payment Disposable of 10,000 NIS. In other words, this is a form of "insurance" that works in the opposite way we’d want it to: for a minor financial event that we can easily cover out of pocket, the insurance pays us the same amount as it would for a significant financial crisis from which we’d struggle to recover. This is not insurance, it is a gamble. We feel good because we think that by purchasing this insurance, we’ve taken care of our children’s health (what could be more important than that?), but in reality, we haven’t reduced the risk of an accident happening in the slightest. All we’ve done is create a situation where, God forbid a child gets hurt, we’ll supposedly be less upset because we’ll receive some kind of payment for it.

Why do I write "some payment" when I previously wrote "allegedly" regarding the 10,000 shekels that the insurance company promises for a breakage? Well, if you’re buying "not insurance but a gamble," you shouldn’t be surprised if the offer is written by savvy marketers with a special "fine print" section just for you. Please take note. There is a clear table at the top of the page detailing the benefits for each plan (want to know what the payment is? Look for it…). At the bottom of the table it says: "The full and binding terms are the terms in the insurance policy." Most people assume that if the table states that a fracture is covered for 10,000 NIS, then the "full terms and conditions" won’t contradict that. Your faithful servant, however, is a bit of a perfectionist who opened the policy and looked at "Table B," the one containing the 'full terms and conditions":

In other words, it's true that we promised 10,000 for a fracture, but that was actually a LIE. For a rare fracture of the spine or pelvis, you will receive 10,000 shekels, while for a common fracture like a hand, leg, skull, etc., you will receive only a third or less of what we promised in our "show window." You can guess that you won't receive what was promised on the main page for a burn either, but rather there is an additional table with deductions for burns, and so it goes for all the other misfortunes.  Tip: Whenever you see a statement like, "In the event of any contradiction between what is written here and what is written elsewhere, the text in the other place shall prevail," be sure to check what is written in that mysterious "other place.”.

According to rumors (the website does not list prices, of course), personal accident insurance for a child costs about 30 shekels a month. A family with three children would pay about 90 shekels a month, which amounts to about 1,000 shekels a year. In other words, if we take compensation for a broken arm as an example, if such an injury occurs in the family less than once every three years, the insurance isn’t worth it, and when a broken arm does occur, the insurance only reimburses you a small portion of what you’ve already paid into it.

Risk of non-payment by the insurance company

Insurance is supposed to "hedge" (from the word “hedge”) our risks, that is, to limit them. Instead of risking the loss of an apartment worth 1.5 million shekels, we are willing to pay 1,500 shekels each year (as an example) or 60 × 1,500 = 90,000 shekels over the course of our lives. The certainty of losing 90,000 shekels is preferable to us than the uncertainty and risk of losing 1.5 million shekels.

Claims Adjuster

One risk that many people fail to consider is that insurance companies—which have collected premiums every month with the precision of a well-oiled Swiss watch—will try various creative ways to avoid paying out when an insured event occurs. Sometimes, you can learn a lot from the names of the representatives who are supposed to meet with you at different stages of the process.

If you need insurance money, you won't encounter a "customer representative" or any kind of "assistant." The man or woman responsible for policyholder claims at the insurance company is called a "Claims Adjuster"This means that’s what is supposed to solve the insurance company’s bothersome problem of money it’s supposed to pay.

They are allowed to deceive you, you are forbidden to deceive them.

Unfortunately, Israeli law greatly favors insurance companies. Apart from a tiny penalty interest for non-payment of undisputed amounts, insurance companies are not punished at all for not paying insurance money, even if it is proven in court that their employees defrauded the insured and lied to the court. This means that for any insurance claim, the insurance company can claim there is a "dispute," drag the insured to court for several years (during which they cannot, for example, fund medical or nursing care), and then, if the insured was lucky enough to stay alive and afford a lawyer despite their hardship, they will receive from the court what they should have received from the outset.

On the other hand, an insured person who is caught defrauding even a small amount, for example, if their entire house burns down but they claimed there was one extra television in the house, will lose All of the insurance money Including those to which he is legally entitled. Unlike Israeli law, U.S. law, for example, allows for the award of punitive damages, the purpose of which is not necessarily to compensate the plaintiff but to punish the company for its conduct; therefore, the amount can be high enough to make such misconduct unprofitable. For example, an American plaintiff who sued BMW for failing to disclose that the new car he purchased had undergone paint repairs prior to sale was awarded compensatory damages in the amount of $400,000 and punitive damages (the purpose of which, as noted, is to deter the company from repeating the act) in the amount of $2,000,000 (two million dollars).

The statute of limitations for insurance claims is three years (not seven).

Please note! Sometimes insurance payments are withheld legally but in a shady way. Many know that the statute of limitations for legal claims is seven years. Few know that insurance claims have a special rule that states Shortened statute of limitations of only 3 years. The year count begins from the occurrence of the insurance event. Imagine a family where a child dies under circumstances qualifying for insurance. In the first year, the parents are in shock, but despite this, they contact the insurance company and meet the Claims adjusters that require this document or that document. The document is sent, two months pass, the parents remember they didn't receive an answer, they contact again and are required to provide another document. And so on... Have three years and a day passed? The parents won't receive money. I wrote about this too In workplace life insurance as a substitute for mortgage insurance.

Do not check the policyholder's statement

A final practice to avoid payments is not checking the insured's statement when the insurance is taken out, but only when the need to pay arises. For example, an insured person is required to fill out a health declaration when taking out insurance. The insurance company receives permission from him to open his medical file but does not use it at this stage. If the insurance company is required to pay, it will open the insured's medical file and look for discrepancies between his statement and the medical file. The insured forgot that he was hospitalized for two days at the age of two? Too bad... he actually could have received all out-of-pocket medications at the insurance company's expense.

Advanced riddle. A person took out insurance for their apartment's contents and declared property worth 50,000 ILS. Their home was burglarized, and the insurance company discovered that the value of the property in the home was 100,000 ILS, not 50,000 ILS as the insured declared. What is the amount of compensation the insured will receive? Whoever thought of 25,000 ILS will receive a t-shirt and a record.

If you want to read more about the antics of insurance companies (a Parkinson's patient who cannot drink water from a cup, but is not considered bedridden because only water spills on her, a person with a cancerous brain tumor who is not receiving insurance money because they did not provide test results which hospitals stopped performing many years ago, etc...), you are invited to read In the excellent column by attorney Haim Klir on YNET.

In summary

• Insurance should only be purchased against an economic risk from which we cannot recover on our own. The wealthier we are, the fewer risks there are from which we cannot recover, and therefore, the less insurance we need. 
• All adults in the household need to know which insurance policies the family has. All Insurance documents should be kept in a centralized and organized manner. It's possible that the person who has to handle the insurance claim will not be the one who took out the insurance in the first place. It's advisable to scan insurance documents and save them online (DROPBOX, etc.). Remember that insurance is meant to cover, for example, a house fire. It will be more difficult if the documents are burned or soaked by the firefighters. 
• It is advisable to approach with caution recommendations from those whose compensation depends on them recommending increased consumption of a particular product.
• When the compensation amount is not dependent on the damage amount, there is a high chance that it is not insurance but a "lottery ticket" and it is best to avoid it. 

I had the pleasure of being a guest on Michal Zafir's morning show on Channel 10. In the interview, we discussed two mistakes people make when preparing to purchase an apartment. Of course, I didn't mention the main mistake of consulting someone whose interests differ from ours, because I'm quite sure my readers already understand. A bank has a mortgage broker and not a mortgage advisor.. But the next step in our deliberations is to consult with those we've been accustomed to consulting from the moment we learned to speak – our parents. They are available, experienced, and surely have our best interests at heart.

Why not consult with parents about a mortgage?

So, why shouldn't we consult our parents? In an interview, I explained to Michal that parents are, to a large extent, too much in our favor.

We tell them that we found a wonderful apartment near a park where we can play with our future children (our future grandchildren) with at least five exposures, etc. Our parents see us glowing about finding the apartment. What are the chances they'll want to bring us down and say something like, 'Can you show us your plan for paying back the mortgage in 6 years if the interest rate goes up?"

This won't happen. The parents are too emotionally involved. Additionally, parents generally don't have the technological means, nor necessarily full information regarding our income and expenses, and many other data points.

Even parents whose profession is economics aren't regularly involved in forecasting future interest rate changes, nor do they necessarily have readily available the technological tools to translate these forecasts into numbers.

What do our parents typically have? A set of beliefs and outlooks on life that have taken shape over the course of their lives. In other words, if they are 70 years old and formed their views at age 22, for example, then we can say that a large part of their outlook on life took shape about fifty years ago, when the entire economic system was different in many ways. Ask your parents how they cope with prices rising by 50% in a single month? (The 1980s) Answer: They buy lots of canned goods on payday. The situation is even more serious, because our parents, too, inherited many of their economic views from their parents. Now we’re talking about the economy of the early 20th century in Morocco, Poland, or any other country from which our grandparents came.

Consulting with friends about a mortgage is also problematic.

Another source for gathering information is friends. Problem! We are usually surrounded by people who are a good fit for us. Meaning, often similar to us. So we consult with friends whose views are initially similar to ours and then think, okay, if "everyone" thinks this way, it must be right.

News flash, it's not "everyone" who thinks like that, but our friends think like that, and our friends are, in the first place, similar to us in many ways. We talk to the mirror (more or less) and then reach an agreement with our reflection in the mirror that everyone thinks like that. What's more, if we want to listen to "Everyone"It would be wise for us to first check if "everyone" is satisfied with the results they reached with their decisions. Clients who approach me often say, "I want a low refund because the refund Always Rising. The return doesn't always rise. The return "always" rose for "everyone" because those everyone acted in a certain way that isn't necessarily the correct way.

Consult Google and Facebook about the mortgage?

Okay, we have Google and Facebook left. You can really get a wide variety of opinions, right? An unbiased algorithm will give us a correct answer from Google or "the wisdom of the crowd" will give a correct answer from Facebook. These aren't friends or family, this is "the wisdom of the crowd." Right?

That's not right at all. Google and Facebook always aim to bring you the most accurate information. The simple issue is that most people think about the definition of "accurate" in a completely different way than Facebook and Google do.

When we think of the word 'right," we think of true, accurate, well-founded, etc. Facebook and other entities that work with algorithms think of "right" in the following way: what will keep the user in our environment the longest and thereby expose them to the most advertisements.

Companies hold information that allows them to guess quite well what we think about a certain topic, and then when we search for that topic, we get the most relevant results. Us. There have been many discussions with these corporations on sensitive issues. Mark Zuckerberg, for example Protect people's right to see posts that claim the Holocaust is a fabrication.. According to him, the fact that the person publishing these posts is "innocently mistaken" does not justify censoring them.

Now, let's assume I discover neo-Nazi leanings. If the news Facebook feeds me is about International Holocaust Remembrance Day, I'll leave it and stop seeing ads. Conversely, if I keep seeing more and more posts from "innocent believers" "proving" that there was no Holocaust, I'll stay in front of the screen longer, see more ads, and eventually, I might buy something useless. But I'll also get the impression that "everyone thinks there was no Holocaust.".

The exact same thing happens in Google searches. At least in the news section and under local businesses, for several years now, Google has been providing everyone with different search results based on what it thinks is "suitable" for that person. It's not for nothing that the Chrome browser asks you to "sign in" when you use it. This way, Google can document all the sites you've visited and know what type of results to bring you.

For example, when you type "meat" in the search bar, do you want to see a steak recipe, or do you want information about the upcoming vegan protest? When you type "Bologna," do you want directions to the city of Bologna or to a "Bologna" restaurant in Tel Aviv? And so on. In fact, both Google and Facebook echo back to us what we've already thought, thereby reducing our ability to receive new information. This is only problematic in the political and business worlds when we want to make a decision on a topic about which we have no knowledge.

What can be done?

First, understanding the problem is a big part of solving it. After we understand the limitations of the network, parents, and friends, we can still ask them but be aware of all the flaws in the answers we receive.

The next step is, of course, to search for information from reputable sources. A reputable economic book or newspaper is usually a good source. You want a source of information that, if it writes inaccurate information, will have something to lose. That is, if the information came from the website http://mashkanta4all.com (a website I made up) and there is no person behind it who cares about their reputation (because they don't have one yet, and because their name doesn't appear on the website at all), you should take the information with a grain of salt.

Compared to someone who has cultivated a positive reputation for years. Always pay attention to potential conflicts of interest with those from whom you receive advice. When choosing a mortgage advisor, Ensure that your payment to the consultant is not dependent on the answer they give to any question, including a question like "Should I take out a mortgage?" 

Another good source of information is lectures. People usually prepare well before lectures. It's not pleasant to be challenged in front of an audience.

Suppose someone rear-ended you at a traffic light, and your insurance company refuses to pay, claiming that the appraiser (from their list) included items unrelated to the accident, and the garage (to which the insurance company referred you) performed excessive repairs. You need to sue the insurance company. Would you hire a lawyer whose fees are paid by the insurance company? Would you hire a lawyer who, in addition to being paid by the insurance company, also attended the insurance company's college and interned there? Does the very idea of hiring a lawyer like the one described above sound strange to you? Bizarre? The reality, of course, is even stranger, and most of us live with it peacefully simply out of a lack of awareness. 

Conflict of Interest - A conflict of interest is a situation where you are dealing with someone who appears to be helping you, but in reality, their own interests differ from yours. When I enter a clothing store, it's clear that the saleswoman's interest is different from mine. She wants to make a sale, regardless of what it is, while I want a shirt that will make me 1.90 meters tall and turn my eyes blue. Such a shirt doesn't exist yet, but any shirt I try on will usually be met with the remark - "It fits you perfectly." This is a situation where it's easy for us to identify the conflict of interest, and therefore the saleswoman's comments are taken with a grain of salt. In my case, there are strategies I employ in a clothing store:

• I'm asking my wife to buy me a shirt.
• I go to a store once every few years, find my size, and buy five shirts at once. An important principle in decision-making – if there's a game where your chances of success (in financial terms – expected value) are low, play it as little as possible.

In the financial world, conflicts of interest are much harder to crack and much more damaging than in a clothing store, for example.

Three commercials are running today by three different banks (they do tend to copy each other a bit, don't they?).

Bank Leumi Trying to convince us that bankers (or) are not needed at all Mortgage advisors (In bank language) and that in the middle of a soccer game you can take out a mortgage.

Irrespective of this article, if you are a banker, pay attention to what is happening around you. Banks have seen you as a burden for several years and will gradually try to reduce your numbers. My recommendation – Look for another job. 

Back to the article, bank Tapuachat Trying to convince us that all the information is with his consultants and that's where we should plan our future. To this end, they are even doing one of the most despicable things advertisers do: recruiting our nostalgia (in this case, the wonderful song "Elah"), to create a feeling of connection to the advertisement and better compliance with the advertisement's messages.

Setting aside the melody, the beautiful cinematography, Dvir's wit, and the array of colorful characters, in practice, this is a classic example of a conflict of interest. You want to pay the bank as little as possible, while the banker is being instructed by the bank on how to make you pay as much as possible. He is measured by the price at which he sells you a mortgage and receives a bonus to his salary if you pay more.

Bank Hapoalim is not holding back, and it too is now advertising its advisors who will know how to solve any issue.

Think about it again. Suppose you wanted to sue Samsung because their refrigerator isn't working and they aren't honoring the warranty. Would you hire a lawyer whose salary is paid by Samsung? What about a lawyer whose salary is paid by Samsung, who set his training program as a lawyer, and even pays him a bonus on top of his base salary if he loses a case against you? So why wouldn't you hire a lawyer for a lawsuit with a maximum damage of, say, 10,000 shekels (the cost of the refrigerator) if the other side pays his salary, but when the damage could be half a million shekels, you're willing to trust a bank employee who meets all the criteria of that Samsung lawyer?

How is it that you are willing to trust an agent Insurance Answering most of the definitions of a Samsung lawyer (the only difference is that the state conducts the qualifying exam and not the insurance company, and to the best of my knowledge there is no additional payment for losses in claims, only for selling additional policies, including) Policies that are unequivocally detrimental to the client).

This conflict of interest is harder to identify for two reasons:

• In other fields, bank advisors actually have an interest similar to ours. For example, the investment advisor wants us to profit so that our investment portfolio grows, and we pay more fees. In other words, we have the same interest – growing the investment portfolio. Parenthetically, it should be noted that here too, because there is a commission as a percentage of the portfolio's volume and a commission for each transaction, the investment advisor sometimes has an incentive to generate many valueless transactions for us.
• On one hand, we are less skilled at purchasing a mortgage or insurance compared to buying a shirt. On the other hand, when the sum is large, people invest less thought into it. Professor noticed this behavior.' Parkinson's. When a decision is bigger than we're used to making, we become somewhat "numb" and let someone we perceive as an authority figure make the decision, without even checking their qualifications, motives, or experience (who has ever really asked a banker, regardless of their position, when they started in that role?). The bank has invested a lot in creating an image of a reliable and stable place (it's not for nothing that there's so much design in the branches). Sentences like Sure thing. The statement expressing the speaker's confidence that what follows a sentence in Hebrew is necessarily true/real is part of Western culture.

About two years ago, an investment fund called Keren Or collapsed, and many investors lost their money. It happens. A side effect of this affair makes it very interesting. The fund's presenter was Shlomo Maoz, who is known as a media personality and star economist. Now there is The plaintiffs You are mistaken in your claim that the fact that he recommended the fund caused them to invest in it. To the best of my knowledge, it has never been claimed that a presenter has responsibility for the product they advertise. For example, can one sue Marlboro Man On the dangers of cigarettes? (The three models of "Marlboro Man" will rest in peace after dying of lung cancer). This lawsuit will be interesting regardless of its outcome. If the judge rules that the company is responsible, it will be a sensation in the advertising world. Celebrities and ordinary people will think ten times over about what products to advertise. I think that would be excellent. Even an opposite ruling, that the presenter in an advertisement has no responsibility for what they say, will be significant. Although it might be a declarative significance, the public might better understand the world of advertising and the reservations one should have when taking any recommendation from this world.

What should be done to ensure you don't receive advice in a conflict of interest situation?

In his book, behavioral economist Prof. Dan Ariely, who was himself the victim of a severe accident in his youth that severely burned large parts of his body and face, recounts that when he was hospitalized and it became apparent that half of his face would not grow stubble, one of the doctors recommended he get a tattoo of stubble on his face. He refused, and some time later discovered that the same doctor had written an article about the effect of stubble tattoos on the psychological state of injured patients. This means that conflicts of interest can arise in unexpected places and even with good intentions (I assume the doctor genuinely thought it might improve his psychological state).

So, how should we act to neutralize external influences on the advice we receive? First of all, make an effort to avoid such influences. It's worth remembering that when there is an influence, it is sometimes on the subconscious of the advisor and therefore can also affect them if they are your childhood friend.

If you are going to get advice on something And your advisor receives their salary from another party. Clearly, this is a big problem, and the advice doesn't deserve to be called advice at all. But mind you, even if the advisor is paid only by you. Does salary depend on the answer? What will the advisor give? If you go to a "real estate advisor" (broker), for example, and ask him about the advisability of investing in a particular apartment, when the advisor will only receive his fee if a deal is made. This is not good advice (as mentioned, even if it's your childhood friend) because the advisor's fee depends on him saying the deal is good for you. If you go to a mortgage advisor and his fee is a percentage of the mortgage you will take, what do you think his motivation will be to suggest you reduce the mortgage or recommend not taking out a mortgage at all because it's too large for you?

Only go to an insurance advisor or a pension advisor who will not sell you any products as part of the consultation. Ensure that the payment is for the consultant's time and is completely independent of the consultant's answer. The exact same applies to Mortgage advisor. Please note, not a mortgage consultant but a finance consultant. If we call our consultant Mortgage consultant We are already dictating the requested solution (mortgage). WhileFinancial advisor There are supposed to be additional tools in his solutions arsenal – a loan from the Ministry of Defense for career soldiers, a loan from pension funds, or a clear statement that it is not advisable for you to take out a mortgage, or that you can purchase without a mortgage, and many other solutions. A consultant whose fee remains the same regardless of the answer they give. He's the advisor you need.

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He put his hand in the plate – did nothing. "Tamán Lazy "His hand to the dish, even to his mouth he will not bring it back" (Proverbs 19:24). This means to keep eating, no matter what is happening around you.