You're surely on the right track there, but the terminology might be tangled. Insurers LOVE highly predictable outcomes - as you go on to point out. If it's predictable, then they'll offer insurance on just about anything, allowing you to smooth out your own risk because you're just one individual, while they let the law of large numbers work to their favor to provide steady profits. It's not the predictability, it's the frequency. In the case of term life insurance, young people die infrequently, and even when you're getting on in years the majority in your age cohort live to see another January. That makes it possible to offer affordable rates, that increase only gradually until you hit your 60s or so. The Twins could ask to smooth out their risk on Donaldson, but Lloyds of London (or whoever offers that kind of policy anymore) would charge so much to reflect the 50% probability of a claim, to just pull a number out of the air, that the policy itself would be a huge burden. Lloyds would charge 50% of Donaldson's $21.7M salary, plus a markup for profit. Paying say $13M for a policy that pays out $21.7M if the injury hits is like betting on Red at the roulette table except with worse odds. Actually the policy would be pro-rated as the season goes along, so the policy premium would likely be smaller than I said, as it might pay a smaller fraction of the salary if the injury hits in August than in April, but I don't want to get further lost in the weeds than I already probably am.