NakedPuts2011

I think of it this way:

If my human capital volatility is high (i.e - I work in a very risky environment where I could either make a lot or go home), then I'm most likely to be the guy who is risky by nature and confident that even if my career is volatile, I'll still bounce on my feet and hit it big.

Having this attitude dismisses the thought of paying for life insurance because hey, I'm the guy that's going to hit it big anyway, and the insurance money is pocket change for the lifestyle I'll be living.

Now, if I'm a professor who makes a stable salary and benefits, my human capital volatility is low, but I'm still nervous something might happen because I'm the guy that enjoys being risk-averse, so I might as well buy some life insurance should something happen.

Hopefully that explains it a bit.