How do life insurance companies make money?
July 16, 2010 - 12:22 pm
I mean, there’s not really an ideal customer. Everyone’s gonna die.
I did the math for my life insurance. I’m 22. I’m young, healthy, and I don’t smoke. I have a $20,000 life insurance policy that I pay $10 a month for. Even if I live for another 70 years, I’m only going to pay them $8400, meaning that they’re going to lose $11,600.
How do these companies stay in business?
Basically what these life insurance companies do is they invest 70% of your money in stable or govt. related funds and projects. Then they invest in gold. Also they give out your money to people as loans. Thus they earn a fat premium of the money that you give them.
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