Parents often create more offspring than they normally rear to independence and do so for at least four reasons: (1) tracking available resources. (2) progeny choice, (3) food-caching, and (4) insurance against the unexpected early failure of offspring. The insurance hypothesis has been invoked most often for birds practicing obligate brood reduction (e.g., eagles, pelicans. boobies), but recent work suggests it is broadly applicable. Under the insurance hypothesis, parents create a pessimistic clutch, assuming an offspring will fail (e.g., due to accident, predation, disease, injury) whereupon the insurance offspring replaces the failed offspring. If another offspring does not fail, however, the insurance offspring is redundant and can either be eliminated through brood reduction or retained within the brood. Here I explore the effects of insurance offspring on the mean and variance of reproductive success. Where an efficient brood reduction mechanism exists, insurance offspring may represent a bet-hedging strategy (sensu Seger and Brockman); parents derive a benefit from insurance offspring through reduced variance in reproductive success. However, where brood reduction mechanisms are absent or inefficient. insurance offspring may increase rather than decrease reproductive variance. In such cases, insurance offspring are most likely to be favored when the frequency of redundant insurance offspring is likely to be low (e.g., large clutches, high rates of offspring failure). A probabilistic brood reduction system may be favored where parents cannot match clutch size to available food and where random failure of offspring occurs. The optimal clutch size will reflect a balance among the benefit of extra offspring in good food years, the cost of excess offspring in poor food years, and the effects of surplus offspring on reproductive variance. None of the insurance, resource tracking, progeny choice, and food-caching benefits of surplus offspring are mutually exclusive and should often act together to favor the evolution of clutches larger than parents normally rear to independence.