Insurance in poker allows you to insure your money when you find yourself in an all-in situation and ahead of your opponent.
It is worth noting that insurance doesn’t exist as an official poker rule, but you can ask for it from one of your fellow players, and more and more online platforms are introducing this option as well.
Insurance exists only in cash games, giving you the option to protect yourself from bad beats and end up with some money even if you lose a pot due to your opponent outdrawing you.
For example, you find yourself all-in before the flop with pocket rockets against pocket queens. Both you and your opponent have $200, and you’re about 80% favorite to win a $400 pot.
You ask for insurance, and one player agrees to give you insurance, but at 70%. You accept the deal. This means that if your hand holds up at the showdown, you’ll give the insuring player $120. If you lose, however, the insuring player will pay you $280.
Mathematically speaking, you should never take insurance that’s worse than real odds, but some players do it to lower the variance, especially when playing higher stakes than they’re used to.
