What the "gurus" are talking about when they talk about insurance is buying puts, rather than selling them. So a portfolio you're describing (it's sometimes referred to as a "collar") will look smth like this:
Long stock (say, currently at 100)
Short the 150 strike call
Long the 20 strike put
The payoff on a structure like the one above looks, unsurprisingly, like a payoff of a call spread. Specifically, your downside is limited, but at the expense of accepting a limited upside. Furthermore, I find that describing the whole "covered call"/"buy-write" strategy as a way to "rent" shares is a little misleading. Unless, of course, you enjoy not getting the stuff you have rented back. Still, everything has its place.
Thank you for that, it's clarified a lot for me. Can I be so bold as to ask you for some general advice for how best to generate a monthly premium whilst keeping risk in check?
For example, do people ever sell a Call and a Put? What would you do if your only concern was to make 4% yield on the premium each month?
Thanking you in advance ...