I haven’t done much research but from what I’ve read, the life insurance monthly payments are under $100 but will pay out huge numbers.
The example I found –
“Insurance Barometer Report said a $250,000 term life insurance policy for a healthy 30-year old would cost $500 a year or more.”
That’s like $25k total payments if they reach 80 years.
Am I missing something? How can companies afford this? Why isn’t absolutely everyone insured?
In: 6
The part you are missing is the “term” in the title.
Term means the life insurance is only for a specific duration. If you are 30 and buy a 15 yr term policy you are gonna need to get a new policy when you turn 45. This allows insurance providers to supply cheap life insurance policies to people who’s age and health makes them an extremely low risk for dying due to a covered reason.
The older you get or the worse health you are in the more expensive and limited these types of policies become since you are a much higher risk of dying and making the company pay on the policy.
Remember: Insurance is about sharing risk for the insured. It’s a gamble (backed by statistics) for the company.
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