1. J Scott BurkePRO
    President, Newbury Inc., Evansville, Indiana
    Life insurance companies make money the same way that car insurance companies make money...from the premiums you pay.

    The most simple form of life insurance is term life insurance. If 100 people buy a 20- year term life insurance policy, they will all pay premiums for 20-years (less if they cancel early) but only 1 of them will die during the 20-years. 99 of they will outlive the term.

    The life insurance companies price each policy based on the likeliness that you would die while the policy is covering you.

    You don't have to worry too much about insurance companies. They know the numbers. They make money.
    Answered on April 10, 2013
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