Yesterday i was shoping for an preparation process for my daughter as well as i aproched the single internal insuarance company.i asked for asum assuared of 50000 over 5 years term.
i was told i will be profitable sh 1481 any month for 5 years.that will be my total investement. in lapse i will paid as follows.
(a)5000 during the finish of the any 5 years
(b) upon majority of the process i will be paid my total investment and 7.5%x50000×5.
When i looked during the on top of total it looks this guys have been profitable me some-more than i invested . What distinction have been they gaining from me?
assum they get the single billion business similar to me will the association not run broke or is there something i dont know?
HOW DO INSURANCE COMPANIES MAKE PROFIT?
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people pay crazy high prices for it and few people collect in comparison to those who pay . the co. also have BIG investments. they own half the world.
Your kidding right? They make money from your premiums and assume that you are never going to file a claim. Are they trying to sell you an annuity or whole life/universal life policy? If so forget it. They are bad investments. They are assuming that the minimum interest rate will be 5%. That isn’t the case. It can go up or down. You would be better off getting a 10,20 or 25 year term policy at a lower monthly premium (depending on your age) The younger you are the cheaper the premium. Take the difference of what you would of been paying and invest it diversely. Those policy’s only benefit the agent. I paid 10 years on a similar policy that was worth $6000 and the end of 10 years.
“education policy” is that a type of annuity?? You posted this to the USA board, I’ve never heard of this.
Insurance companies don’t have a billion customers.
Here’s how they make money: 1. many policies cancel (end up not getting paid) before payout time. They never pay out. 2. Insurance companies INVEST your money. but 3. that’s an amazing return.
ONe type of policy that promised that return, well, it was a CONDITIONAL promise, “if” the insurance company earns 15% you get half, then you “shouldn’t” have to pay premiums any more, as the premiums will be paid by the policy earnings. Well, Guess What!! Earnings WEREN’T that high, premiums WEREN’T paid, and policies cancelled with no payout!!
Whoever the governing regulatory board is, I’d give them a call and check out that company. Because there ain’t no such thing as a free lunch, especially with insurance.
That’s not a term policy. That’s investment grade life insurance, and the returns are not guaranteed. Read the fine print on the expenses inside the product. If you truly only need 5 year term (don’t know why, but it’s possible it fits your situation), then it should be pretty cheap.
By the premium which u pay
the insurace company makes a profit by taking the money that you give them and investing it. they will then return some of their gains to you in the form of a dividend/building a cash value. this cash value grows on a tax defered basis so long as the policy is in force (you are still paying the premiums). as long as they are