I was going through life insurance policies and noticed that even if I lived to be 100+ the amount of money I would pay into a life insurance policy would still be lower than the insurance pay out. I imagine many people die much sooner and get paid out even more than what they contributed. How do life insurance companies still profit off these policies when everyone will eventually die and cash out? It’s not like car insurance where you can go without an accident.
In: Economics
Ask yourself “How can a casino be profitable if everyone wins?”
The answer is that “everyone” NEVER wins. The odds of such an occurrence is so low statistically as to be virtually impossible.
If that unicorn of an event were to actually come around, yes the host insurance company (or casino) would be screwed. Often **they** also have insurance on the books (through investment companies handling their huge reserves) and the odds that all the casinos with insurance have that double-layer statistically uncommon event at the same time is effectively zero.
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