Why insurance companies get richer n richer while insurance was suppose to not make them richer??????????

Question

Why insurance companies get richer n richer while insurance was suppose to not make them richer??????????

Answer 1

Insurance companies are a business. Not charities.

Like any other business (including banks, your doctor, your grocery store, retail stores, etc) if they do not make a profit they will go bankrupt and cease to exists.

Insurance companies make most of their profits from investments. These are re-invested back into the company in the form of equipment, training, buildings, reinsurance and reserves. (reserves are the money they set aside to pay your claims.). As the cost of vehicles, health care, fraud goes up--- more and more reserves are required.  

Answer 2

Insurance companies, like life insurance, started out simple with one product for a certain price according to your age. They take the risk that you will not die earlier than the majority of people. It's gambling basically.

Now where the jerks make the money (and of course most people dont know this), is they take the simple life insurance (Term Life) and add on bells and whistles. "Oh lookie at this! You can invest also with this Whole Life Insurance! You will have money to send your kids to college! Or take out anytime you want!"

Now what they don't tell people is you pay twice as much and they don't start saving your extra money your paying each month for 1-3yrs! You just lost money!!!!!! Then when you do have savings they will only let you take out your money if you borrow it at a 6-8% interest! You pay them for your own money! And if you do die; God forbid; and say you have 100k of insurance on you and 20k in savings your family does NOT get both! They get one or the other! It's in the life insurance contract! Most companies are screwy, be careful who you buy from.

Answer 3

You have it wrong.  Insurance companies are in the business of making money.  The owners of the policy are not supposed to profit from insurance claims.

In other words, you the policy owner, legally can not profit from an insurance claim.  The company that backs the policy makes a killing off of your premiums.

Answer 4

What are you trying to say?  Businesses are in business to make money, not break even.

Answer 5

You don't want your insurance company to make a profit?

Here is a pop quiz for you - Choose A or B

A. I want my insurance company to make a profit in most years and to be financially sound so that in the event of a natural catastrophe my company will be able to pay for the damage to my home and others.

B. I want my insurance company to lose money in most years so that when it has to pay my claim the company has no reserves to draw on and then becomes insolvent or bankrupt.

A or B?

Answer 6

Insurance companies are in the business of trying to make a profit.

They have good years and bad years like every other business.

What is your question?

Answer 7

Most insurance companies are for-profit businesses.  Their goal is to make a profit for their stockholders.

If you think insurance companies are making excessive profits - become a stockholder yourself and share in the profits.

Answer 8

Insurance companies aren't getting richer and richer.  If you truly believed that, you'd put your money where your mouth is, and buy their stock.

Me, I don't buy insurance company stock.  Coca Cola is MUCH MUCH more profitable.