What exact is whole life insurance, and how do life insurance companies profit from selling it?
Agents are always extremely keen about selling my family whole life insurance instead of term. According to the agents, whole life is preferable to term since it does not expire and as a result the beneficiary is guaranteed some payment upon the death of the insured. However, why would the insurance company profit from such a setup if they are bound to pay back an amount that is at least equal to the total amount paid?
I have tried to do some research on my own, but I still can’t seem to fully understand this matter. Any help will be greatly appreciated!
September 14th, 2009 at 8:07 AM
insurance website:
http://insurance21.cn
September 14th, 2009 at 8:07 AM
Time value of money. They invest the money that you give them and make a profit off of the interest.
September 14th, 2009 at 8:07 AM
it pays out on death, it’s generally more expensive than term insurance because it has to pay out at some point.
As the insurance company’s customers pay premiums, funds are built up to cover claims. As the whole of life insured customer gets older, the amount of money kept in reserve by the company to pay the insured sum if the holder dies increases.
It does work out that the insurer can provide this policy and make profit.
September 14th, 2009 at 8:07 AM
Look in the real world.
Decode this lyrics " You;ll see "
Whole life?
Good as financial security for beginners with limited income?
While still crawling in time.
If married with limited income?
A good source of financial security for the family?
Should any unforseen circunstances do happen and hit the cross road in time.?
Will be emergency funds for the family when we don’t make it home in time?
If we do live longer can be a source of income for retirement too in time.
Annual or monthly contribution by members will be reinvested by the the issuer in time.
Mostly we do need it since we only have to hands to generate extra source of income?
It’s just like investing on a piece of realty ?
Purchasing a 100,000 worth of realty with easy payment scheme in time?
With time the realty will be there waiting to be cash out in time?
Most defaulters made the mistake of not continuing payments.
Those who made it through never live to regret with all those saving at a lower cost back in the past when they were crawling in those days in the past.
Luke 21.30-36
Luke 24.44-45,47-48
What do you think?