Maybe I just don’t understand what they’re doing. BUt it seems to me if I take out a 10 year policy that costs $100 per month, I’m betting that I’m going to die within that period of time and the company is betting that I won’t or that they won’t have to pay out. If I get to the end of that 10 year term, then I’m just out $12,000. What am I missing?
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Insurance is not a way to make money. It’s a way to take care of things if something catastrophic happens. In the case of life insurance, the purpose is to take care of your family if you die. If you don’t die, that’s good news. If you do die, that’s bad news, but fortunately for your family you paid a monthly fee to maintain a contract with a company who will give your survivors a lump sum of money to help them survive in your absence.
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