When the dealer's up card [the card that you can see] is an ace, you will have the option to get "insurance" in many casino's. If you opt to take the insurance, which is usually going to be half of what you bet, you will receive all of your initial bet back if the dealer has a card valued at 10 in the hole. If you bet 10 dollars, you could pay 5 for insurance and get your 10 back if the dealer was dealt a natural blackjack, which means you would be down 5 dollars instead of 10.
Insurance sounds like a nice way to protect yourself from losses, but more often than not, you are screwing yourself over by taking this sucker bet. There is roughly a 30.5% chance that you, or the dealer, will receive a card that has a value of 10 [10, Jack, Queen, King]. For arguments sake I'll even round 30.5% up to 33.3%, or one third. One out of every three times you take insurance, over time of course, it will pay off and you will salvage half of what you initially bet. Two out of three times, you will have wasted half of your bet. However, I will add that the 67% of the time that you do waste money buying insurance, you will know that the dealer does not have 21, which can come in handy when you are trying to make decisions as to whether you should hit or stand.
I know what you are thinking when you are presented the idea of buying insurance. "Well I can limit my losses to 50% of what I initially bet if the dealer has a natural blackjack. If he/she doesn't I still have the opportunity to win the hand." You can convince yourself anything, but that does not make it true. Buying insurance is a sucker bet, casinos around the world would not offer it if it did not pad their profit margins and make them tons of extra cash over time. Blackjack has the lowest house edge of all casino games when it is played right, which is one of the reasons casino's offer sucker bets and 6 to 5 blackjack.
Essentially it all comes down to this, you are paid 2 to 1 for a probability of something that will happen 1 to 2.25 (30.7%). Would you bet on a horse that is proven to have a 30% chance of winning if the payout was 2 to 1? Would you bet on a coin to land on heads if the payout was 90% of whatever you bet? No, that would be a foolish bet. You might come out on top in the short run making amateur blackjack mistakes, but over time those poor decisions will come back to haunt you. Buying insurance in blackjack is one of the worst things that you can do, blackjack is a game of odds, numbers, probabilities… The only way for you to be profitable in the long run is to understand these probabilities and take advantage of them.
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