 How is the loan value of a whole life insurance policy determined? |
The policy may be paid and it is payable on death in the amount of $50,000.
Additional Details
It isn't my policy - I don't have access to the terms.... |
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 How Do I Find If My Dad Is Covered For Braces? |
| I want braces but i don't know if my dad is covered. My dad is a truck mechanic & i want to know if he's covered for braces but i don't want to ask him. so is there any way i can ... |
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 Will I lose my health insurance? |
| Currently, I am over 18 and I am a dependent on my mother's taxes. She is the primary insurer of our health insurance. But If I file taxes, can my health insurance company drop me? I have Cigna.... |
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 Life Insurance Policy - Smoking Test? |
| So I've just recently quit smoking cigarettes and am going to take out a variable life insurance policy hopefully before the end of the year. How long does it take for the remnants of smoking ... |
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 Can my mortgage lender force me to increase my property insurance? |
Live in Florida
Mortgage balance is 224,000
replacement cost for my dwelling is 170,000
Property worth 300,000 including ... |
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 Life insurance & suicide? |
| I know that they don't have to pay if it's within 2 years of purchase. But I have had one for ten years and my husband is the beneficiary. Would he still get that one if my death was a ... |
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 Is this true on the Beneficiary? |
| My husband has his will to his mom and dad to inherit everything but told me recent that I am the beneficiary of his stock certificates .I know he had the stock certficates sent to him in paper form ... |
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 Can you recommend a good auto insurance that offers great service at a reasonable rate? |
I need auto insurance that includes crack window coverage.
I have a 2007 vehicle and my current insurance wants me to pay a $250 deducticle before they will pick up the tab.
W... |
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 What is a pay period? |
| well i started a new job on new year 1/02/08and get paid biweekly its been 2-3 weeks already and i sitll havent got paid the manager never told me what day im gone get psid on and never told me my ... |
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 Can I file a claim against my neighbor's homeowners insurance? |
| While helping my neighbor hanging Christmas lights on his property, I fell off a ladder while trying to get up on the roof. I sustained a dislocated ankle, and a fracture. I am out of work for 8 ... |
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 Medical bill no SSN? |
A month ago I went to emergency in South Carolina. My hands were burned by hot peppers so they applied an anesthetic cream and wrapped my both hands. I spent 30-40mins in there.
I am a ... |
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| I have some questions in regards to starting up a financial consulting business? |
I want to start up a financial consulting business. I have 3 questions.
1) Does anyone know of a broker dealer who will sponser me, along with a ball park estimate of fees I would have to ... |
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 How do you go to the dr. without insurance? i don't think i qualify for govt. benefits!? |
| i feel like crying all the time. or i feel extremely emotional. my job pays too much too qualify for benefits but i don't work enough hours to qualiy for insurance. i can't afford ... |
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 I don't mean to sound stupid hear, but I need some advice on health insurance? |
| I'm looking to buy some health insurance, but I don't know what everything is. So a few questions, plain english answers please. 1. I know that a deductible is the portion an insurance ... |
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nopers | How do insurance companies make a profit? |
What are the logistics? Also: If they really make a profit then doesn't that mean that we really don't need them? (If you know what I mean)
Additional Details
It seems that they wouldn't be in business if we all needed them. If we all had an emergency at once, they would go bankrupt! So does this mean that insurance is a total scam? |
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cotopaxi
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Insurance companies are structured like casinos in some ways. They are betting that the incident (death, injury, sickness, etc.) you are insured against will only happen a certain percentage of time, for which the fees they collect will cover the times those incidents do happen.
Just because an individual might not ever need that insurance, well, never collects on it, does not mean that they did not "need" it, but rather they beat the "odds" of having to use it. |
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mister
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You pay them. How often do you actually use it? |
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Jerry
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Well, most of the time you HAVE to use them. When you get a home loan or car loan, the bank MAKES you get insurance because after all, they own the property until you pay it off.
The Insurance companies make money by selling more policies than they pay on. They also make money by investing the payments you make and by lending money too. |
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OPM
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Just an additional note, some insurers such as mutuals and fraternals have no shareholders. The policyholders receive the profit either directly at the termination of the policy or indirectly through policy dividends or reduced premiums. They make a profit, but each policyholder in a mutual or fraternal is entitled to the extent they contributed to the firm's profitability.
When you buy insurance you are trading a certain loss (the premium) to give up financial uncertainty over a possible future event. If your homeowner's insurance premium were $500 you are absolutely certain that you have lost that money. It is a guaranteed loss. What you have traded is they assume a risk from you so that you can be certain not to be at risk should a defined event occur. They absorb, for example a $500,000 risk, for the premium. The emotional problem with insurance is you really don't want to win the benefit/cost game. You probably don't want to die, be disabled, have your home destroyed, see your children die, have a terrible disease, or see your car totalled.
Even large scale disasters usually do not put insurers under, except possibly local insurers. The insurance industry can honestly boast that no insured in the United States, since the beginning of the insurance guarantee funds, has ever not received what they were entitled to in their contract.
It is important to read the contract though.
As to do we really need them, yes. Insurance permits investors to take risks on third parties that they could not take if the insurers were not absorbing the uncertainty. The Dow would be at 2000 right now if companies had to absorb all of their internal risks. Bank rates would have to be in the double digits to absorb the event risks that insurers absorb. Imagine the cost of an auto loan if the bank couldn't recover from wrecked vehicles. They would have to charge interest sufficient to cover the risk of a car crash destroying their collateral. |
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ANSWERMAN
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Actuaries for Insurance companies calculate how likely it it is for some event to happen. Using these statistics they cna they figure out how much to charge so that they stiil make money on all of their policies. Some policies will have a claim and some will not. Essentially, it is like gambling. Just like the Casino, the house always wins in the long run. While some people will collect more than they paid in premiums, like some of the BlackJack or slot playes will win, most will not.
As a consumer, you have to understand the risk of beeing uninsured vs. the cost of your premium. In some cases you don't get a choice i.e. auto insurance requuired by the government and house insurance required by the bank that holds your mortgage,
In others, say dental insurance , you might decide that since you have never needed any thing other than a cleaning, you will not take the insurance and take the risk that next toime you could need three fillings. |
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dx2000fan
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They make a profit off of the premiums you pay monthly, quarterly, semi-annually or annually. |
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Karus
 |
Great question. Insurance companies exist to make a profit. And, if your accident / insurance usage is below average, you wouldn't techincally need them. (Of course, for auto insurance, it's usually mandated by state law, so be sure to follow the law).
Insurance companies make a profit by calculating the expected payouts/claims based on a lot of factors, including history, projections, etc... and then make sure that they charge more than they expect to pay out in premiums. The premiums of course are adjusted for higher risk groups.
In the end, slightly over half the people insured willl pay more to an insurance company than they recieve, and slightly less than half will get more money from the insurance company than they pay in premiums.
Insurance companies, like banks, also invest your premiums to get a better return on your money.
It's a real science, and insurance companies pay huge bucks to the people responsible for setting premiums and writing those alogrithms. |
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