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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Another thing is you don’t get to choose how much it costs. And sometimes you don’t even get to choose the term length (e.g. people that the insurance company expects will have a high chance of dying during the term, will not be insurable for that term length).
But assuming that they do offer you a 10 year policy, your payment will be determined by their statistical analysis of how likely you are to die, which is why they ask you questions about your job, your lifestyle, do you smoke, do you have dangerous hobbies (e.g. skydiving, riding a motorcycle), etc.
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