Online gambling

Insurance is in fact a bet on the dealer's hand. It is a side bet that pays out 2:1. The option of blackjack insurance is only offered to the player when the dealer's upcard is an Ace.

If a player wishes to take insurance on a bet, he / she can bet an amount up to half of their original bet. If a player placed a bet of $10, he / she can place an insurance bet of $5. The bet pays out at 2:1 which means that if the "hole card" of the dealer turns out to be a 10 point value card (10, Jack, Queen or a King) the player will break even for that hand.

Example: A player bets $10 originally and the dealer's upcard is an Ace. The player takes out blackjack insurance of $5 at 2:1 and then ends up getting 17 for his / her own hand. The dealer turns over the "hole card", which turns out to be a 10 value card. Insurance gets paid out immediately after the "hole card" is turned over, before anything else. The player gets his $5 bet back and also gets paid $10 for the bet. The player then loses the $10 that was his / her original bet. Note the player did not lose any money.

A player can also still win his / her hand after he / she took out insurance on a bet. This will mean that the player will win considerably less on the bet.

Example: A player bets $10 originally and the dealer's upcard is an Ace. The player takes out insurance of $5 at 2:1 and then ends up getting 18 for his / her own hand. The dealer turns over the "hole card", which turns out to be a 7. The player immediately loses the $5 insurance bet, but still stands a chance of winning the game. The dealer ends up busting and the player gets his / her $10 back and wins another $10. Note the player only made $5 profit from this game.

There's also always the chance that the player can lose both the original and the insurance bet on the game. This happens when the dealer's upcard is an Ace, the player takes out insurance and the "hole card" doesn't end up being a 10 point value card and the dealer still wins the game. The player then loses all the bets placed on the game.

Bad Bet
Any blackjack insurance is considered to be a bad bet to take if the player does not have any direct knowledge for estimation (card counting) of what the "hole card" could be. The reason for this is that when the casino pays the player 2:1 when his / her bet wins, the casino is underpaying the insurance bettor.

Insurance is even a bad bet for a player that has been dealt a Blackjack (natural). In this case, the dealer will usually ask the player if he / she want "even money". This means they will get paid 2:2 on their bet instead of 3:2, which makes it exactly the same as taking the insurance bet. If the player refuses to take the "even money" offer and the dealer gets a Blackjack (natural), it's a tie.