How can life insurance companies afford to sell policies to old or sick people?
19 May 2017, 09:44 PM
The company will have less income from the policy than it will pay out when the policy owner passes away. That still makes sense if the company sells to young healthy people. It averages out. But what if the companies specializes in policies for people who have trouble getting insurance? Do they hope to keep... show more The company will have less income from the policy than it will pay out when the policy owner passes away. That still makes sense if the company sells to young healthy people. It averages out. But what if the companies specializes in policies for people who have trouble getting insurance? Do they hope to keep selling new policies faster than the old policies are paid it? Doesn't make sense.  
Answer
Votes: 51

there are limitations on life insurance, in many cases a physical is requireed and if something is found amiss the policy is never issued, they don't insure people who have little likelihood of surviving any period of time
also people in advanced ages cannot get life insurance at all
Meta Analysis
A long question with some complicated concepts. No real monetary issues are questioned, but the question tone is natural. The question isn't very well explained, but well formed.
A long answer and insightful. doesn't focus on cash, and the tone is tentative. The answer isn't very clear, and quite hard to understand.
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