Eli5: How does insurance work ? How is it a good deal for both the customer and the company ?
In: Economics
if it is a health related insurance, it is a two way gamble
you bet you are going to get weird or costly disease in the future, so the insurance can cover your expenses on that. or if you are American, just to cover normal but crazy medical bills
and the insurance company bet on you being healthy and live long
But most insurance company are also investment company. they can benefit a lot by the amount of cash flow collect from customers who brought insurance on monthly payment.
On the other hand, DO NOT purchase any “Saving” insurance. you will get way less compare to what the insurance company can get, it is not fair deal
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