Somebody explain me this because I still don’t get it after discussing this at depth on the AO. How are vision plans a viable business? It seems like they don’t cover big losses that you would buy insurance for. Sure, it makes my eyewear cheaper so I have one but how does this make sense?
In order for the plan provider to make a profit, they need to charge more in premiums than they pay out in losses but why would people pay more for “losses” with very low variance? Is this like a gym membership where the company makes money by betting that most people won’t use it?