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How does an insurance company benefit from insurance?

In: Life Insurance [Edit categories]

Answer:

When an insured purchases an insurance policy they pay the insurance company money for the insurance coverage. This money the insurance company collects is called insurance "premiums". The insurance company, using the law of large numbers, collects more money in premiums than it pays out in claims. The insurance also makes alot of its money by taking the money earned from premiums and then investing it.

First answer by Boscojenkins. Last edit by Boscojenkins. Contributor trust: 3 [recommend contributor ]. Question popularity: 2 [recommend question].

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