How can life insurance be profitable for insurance companies?
How can personal life insurance actually make a profit for an insurer, when it is universal that any insured person will eventually die?
Is it because insurance companies stop offering life insurance cover as soon as the person reaches a certain age, so the vast majority of deaths are not insurable?
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Answer by Whoovian
As some one gets older you could jack up the rates while decreasing the policy
or you could invest and save the funds they were paying while alive.
Thus if you live to be 92 and have paid over your life time
you could possibly have paid $ 500000 into the system.
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