Aetna, Inc.

Aetna is one of the largest diversified health care benefits companies in the world with more than 14 million covered by its most popular policies. More than 400,000 doctors and over 4200 hospitals provide care for Aetna's policy holders. Net income of about $1.7 billion on total revenues of $25 billion isn't tremendously profitable, but the company's over 27,000 employees will be well taken care of.

The principal risk to private health insurers in the United States is that the federal government will step in to either directly limit the industry's profits or otherwise regulate the total cost of health care lower by taking it out on the middle men. While the enormous lobbying power of the insurance industry has already been working on this problem for years, a very real possibility these days is that the federal government will allow private insurers to continue to operate but will sponsor a chosen proxy that will invariably dominate the market.

Government certainly isn't synonymous with efficiency, but the entire health care industry is ripe for serious reform. In a very real sense, Aetna's current size is a powerful hedge against its interests being ignored when Congress finally addresses the issue after the next election.

Insurance

Deciding whether to purchase life insurance and if so how much is a potentially life-changing decision. And not just for those you leave behind. The decision to insure oneself ultimately must be left up to each individual. It may not make sense to spend a large sum each month in order to enrich a distant relative upon your demise. And you can almost certainly invest any money saved on insurance premiums at a higher rate than the insurance company gives you credit for.

But for many people with dependents, life insurance remains a moral imperative. Still, the decision of how much insurance to purchase matters a great deal. Most people can afford to significantly upgrade their insurance coverage without breaking the bank, especially if their employer subsidizes their purchase. But any money spent on premiums is essentially money down the drain.

Many insurance companies advertise plans that build cash value over time and one recent innovation is to return the entire premium value at the end of a predetermined period. This provides a savings mechanism for people otherwise too easily parted from their money, but the investment returns are really sub-par. Even investing in a savings account can earn more interest than buying life insurance.

The best path is clear. Don't buy insurance you don't need and save the rest. If you're young and lack children, it probably doesn't make sense to buy life insurance. But when you do buy insurance, just buy a straightforward term policy. Don't get tricked by a gimmick into poor investment vehicles. And look both ways before you cross the street.