1. J Scott BurkePRO
    President, Newbury Inc., Evansville, Indiana
    By life insurance money, I assume that you mean the money the insurance company pays to your beneficiary? It comes from your and everyone else's premiums.

    Think about it. If one thousand young healthy 30-year olds buy a 30-year level term life insurance policy, all of them pay premiums for 30-years. But how many of them do you think will actually die during that 30-years? One or two of them. Those are the only ones that will get anything back from the insurance company.

    The premiums from all 1,000 times 30-years will pay the death benefit for the one or two that die.
    Answered on April 14, 2013
  2. Tim WilhoitPRO
    Owner, Your Friend 4 Life, Brentwood TN
    Life insurance companies have large reserves to pay claims. They are regulated by multiple departments of insurance in states they do business in. By these regulations they are very conservative investors meaning the don't take a lot of risk with this reserve money. The life insurance industry is a huge industry. According to LIMRA there is $18.4 Trillion of life insurance in force in the United States alone. The other little secret is about 1% of term life insurance pay out claims. Therefore it is a very profitable industry but also a very needed industry. It is a shame that 99% of term policies are cancelled before they are needed.
    Answered on March 18, 2014
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