How Do Insurance Companies Make Money Reddit
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How do insurance companies make money reddit. You can easily start up your own mutual insurance company by just getting together a group of your buddies and collecting 20 from each person with the payout going to whoever some rare situation happens to e g. Insurance companies make money in the following two ways. Posted by 1 year ago. So an insurance company makes money by measuring risks and covering property or business that pose low level risks and that way the number of people that would file claims would reduce and that would also lead to an increase in the company s profits.
View entire discussion 12 comments. How do life insurance policies profit. This is the difference in the amount of money collected from the people as premiums and the money paid when a claim is filed in the hour of need. Just make sure it doesn t run afoul of your local lottery laws.
How do insurance companies make money. Same way insurance companies work. New comments cannot be posted and votes cannot be cast. The claims they pay out as long as that ratio is positive plus expenses you re going to make money and you can invest or grow with that money as you please as long as you keep enough cash on hand to pay out the expected claims it s a legal requirement that you keep a certain amount on hand based on the total premium the.
Common issues average cost of repair availability of parts etc. No insurance company profits directly from the premiums. Popular all random users askreddit pics news worldnews funny tifu videos gaming aww todayilearned gifs art explainlikeimfive movies jokes twoxchromosomes mildlyinteresting lifeprotips askscience iama dataisbeautiful books science showerthoughts gadgets futurology nottheonion history. You could even set up one of those olde tyme survivor pools whereby the last survivor of a group gets the pot.
One morning the an agent i worked for whispered to me most insurance agents are millionaires it was mid morning. Every other major line of insurance auto property liability etc is trying to earn a reliable income by managing their incomes from premiums vs. How do they even break even much less turn a profit. First we have the cost of the warranty and the limits of liability.
It seems like the point of insurance from the customer s standpoint is to pay less money than you get. All insurance companies make money on investing the premiums paid in over the years. Every warranty has a financial window. Many policies lapse or cancel before they are ever used allowing for payout to be lower than the interest made.
He wanted me to buy to agency from him. Does the policy make more money from the customer over time than it spends when they die. This thread is archived. Do they expire at certain ages.
Best suggested top new controversial old. He had just arrived at the office and left for a golf outing shortly after our meeting. As another user mentioned they use many factors to determine the probable total cost of repairs for the car e g. How the hell do these extended warranty companies make money.
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