How Do Insurance Companies Make Money Reddit

How do life insurance policies profit.

How do insurance companies make money reddit. How the hell do these extended warranty companies make money. New comments cannot be posted and votes cannot be cast. Reddit gives you the best of the internet in one place. Common issues average cost of repair availability of parts etc.

As another user mentioned they use many factors to determine the probable total cost of repairs for the car e g. First we have the cost of the warranty and the limits of liability. 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. Does the policy make more money from the customer over time than it spends when they die.

Do they expire at certain ages. He had just arrived at the office and left for a golf outing shortly after our meeting. View entire discussion 12 comments. You could even set up one of those olde tyme survivor pools whereby the last survivor of a group gets the pot.

Insurance companies make money in the following two ways. This thread is archived. 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. He wanted me to buy to agency from him.

New comments cannot be posted and votes cannot be cast. It seems like the point of insurance from the customer s standpoint is to pay less money than you get. No insurance company profits directly from the premiums. One morning the an agent i worked for whispered to me most insurance agents are millionaires it was mid morning.

Many policies lapse or cancel before they are ever used allowing for payout to be lower than the interest made. 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. How do insurance companies make money. Every other major line of insurance auto property liability etc is trying to earn a reliable income by managing their incomes from premiums vs.

Same way insurance companies work. Best suggested top new controversial old. Just make sure it doesn t run afoul of your local lottery laws. 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. Every warranty has a financial window. 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. This thread is archived.