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
Most life insurance polices lapse before any benefit gets paid out. Even on policies that don’t lapse, some still don’t get paid out because no claim is ever made. It’s a somewhat shadier business model than property and casualty insurance where the policy holder is still alive to fight for their benefit.
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