Lots of people play blackjack but have no idea how insurance works. Periodically the dealer will ask you if you want make an insurance bet, and most people just say “no” without knowing what the bet offers. The concept is simple enough to understand once you see the numbers.
When the dealer’s up-card is an ace, players have the opportunity of taking insurance before the other card is revealed. In most blackjack games the insurance bet can be as much as half your original bet, and pays 2:1. This bet is made to try and recover the bet you will lose if the dealer has been dealt a natural (two card 21). If the dealer has the natural you won’t lose any money. If the dealer doesn’t have the natural then you need to win your original bet to prevent any loss.You can also take the “even money” bet when you have a natural and the dealer has an ace showing. The dealer will ask if you want even money on your natural and pay you 1:1 instead of 2:1, regardless of his cards. This even-money bet has the same payout as insurance.
The insurance bet is essentially a bet on whether the dealer’s next card will be a 10 or face card. An unbiased insurance wager would actually pay 9:4, or 2.25:1, because in an infinite deck, 4/13 of the cards are tens or face cards. But the casino only pays 2:1 on this bet, giving them a sizable edge. That means that the insurance bet is rarely a good bet to make, unless you know how to count cards and you know there are a lot of face cards left in the deck.