How Do Companies Make Money From Life Insurance?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Companies make money from life insurance premiums. If the number of death claims causes the life insurance company to pay out more than is brought in, the company needs to go into reserves to pay claims. That is why it is so important for life insurance companies to be financially sound, and it is also why underwriting for a life insurance policy usually requires an exam. The life insurance company is protecting itself, and its policyholders, by assessing risk accurately.
    Answered on July 21, 2013
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