At many blackjack tables you are given an option called insurance. This comes into play if the dealers up-card is an Ace. Once the dealer has dealt everyone two cards and the dealers up-card is an Ace the dealer will ask you if you want to take out insurance on your hand. If you decide to take this additional bet you will be insuring against the dealer getting a blackjack. To insure against the dealer having a blackjack you are required to bet half the amount of your original bet. This bet is separate from your original bet. In the event that the dealer gets a blackjack he will pay you at odds of 2/1 so you would end up winning the amount of your original bet on this side bet.

The only time you might consider taking this bet is if you have been dealt a blackjack. There will be a temptation to take this bet because by taking this additional side bet will guarantee that overall you will win money on the hand. However, if you are using the optimum strategy you never take out the insurance bet. It is quite complicated but here is the reason why.

If you are dealt a blackjack and the dealers' up-card is an ace there are four different outcomes depending on whether you take insurance or not.

1. You have taken insurance and the dealer has blackjack.

2. You have taken insurance and the dealer does not have blackjack.

3. You have not taken insurance and the dealer has blackjack.

4. You have not taken insurance and the dealer does not have blackjack.

Say you originally bet £10.

If option 1 occurs you draw your original bet and win the insurance bet so half your original bet is paid out at two to one so you receive 0+15=£15

If option 2 occurs you lose you insurance bet and win with a blackjack. So you win 15-5=£10

If option 3 occurs you draw so you win £0

If option 4 occurs you win with a blackjack so you receive £15

So if you take insurance you will win 100% of the total amount you bet in both situations.

If you don't take insurance you will win 150% of your original bet or 0% of your original bet depending on whether the dealer has blackjack or not. This may make it look like its better to take insurance. However in a deck of cards there are 16 cards with value 10 and 36 with a value other than ten. Take away the 3 cards involved in the bet i.e. 2 aces and 1 card of value 10 and you are left with 15 tens and 34 non tens so the chances of the dealer getting a blackjack are 15 in 49. So you will win 150% of your bet more than 2 out of every 3 hands. This averages out your winnings at 104% of your original bet when not taking out insurance. Therefore the odds are better if you don't take insurance.