Back in my career as a mattress salesman I sold quite a lot of mattress insurance. It wasn't presented that way of course, but rather presented as a service for cleaning or repairing your mattress should you damage it in some fashion. It was very clear to us that the margins on this product were absolutely nuts and although it was a much smaller price than the actual bed a quite substantial amount of the money to be made by salesperson and company was in the insurance.
This sort of thing is everywhere from addons to your new vehicle to extra insurance on your laptop; a short while ago I was even offered insurance on the $5 batteries I bought. In virtually every case the company makes a killing on these addons and the customer gets ripped off. There are a few people who end up breaking their laptops and who are willing to send them to the shop for a couple months to have warranty work done but by and large this is just money down the drain from the customer's perspective. That is, until now. Yesterday I was pitched an insurance addon for the first time that actually made the product *worse*.
"I love flying."
"Let's fly to the castle."
"Isn't my hair pretty?"
"I love it when you comb my hair."
"Let's play together."
ToysRUs offered me toy insurance on this treasure for the low low price of $2.99 so that if it breaks I could come back and get it replaced. This was not a deal I was interested in, in fact I almost laughed out loud at the cashier. The trouble with their sales pitch is that they actually needed to reverse the benefit. If they had told me that for merely $2.99 they would *guarantee* the toy would be broken within a short timespan I might have bought in. After hearing the unicorn's inane chatter for a few hours I was just hoping for some kind of "accident" to finish it off. $2.99 is a small price to pay to shut the accursed creature up for good.