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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It provides perhaps $1,000,000 in benefits for the unlucky people who die during that term. Most will survive and just pay the premium, which is how the premiums can be so low relative to the payouts.
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