posted on Apr, 15 2022 @ 11:01 PM
a reply to:
anonentity
This would take literally hours to explain because there are so many different ways money works in the financial services industry, but I will keep it
as short as possible. Forgive misspellings, I have had a couple beers!
So first, yes, a company will pay out if they they miscalculate the risk, of which there are multiple different kinds. It’s uncommon for the
underwriters of a company to miscalculate risk however though because they have access to all of your records, including driving records as well as
medical records. This can also come down to an agent having to pay out the claim if they lied on the clients application for them (which is extremely
rare). However once approved for life insurance (whole life specifically), you can not medically disqualify after having been approved and are out of
the policies look-back period. So, if a person is 25 years old and gets a policy for themselves then die of a heart attack at 30, the company still
has to pay out on the claim even though the calculation of that risk would be incredibly low for something like that happening. If a 30 year old
applies for life insurance on the other hand, and had a heart attack at the age of 25 they wouldn’t be eligible so no company would insure them
because they have a very high risk to die at a young age. There is also something called accident insurance as well but I’m not going into that due
to time.
This leads into your second question about the sustainability of a company and having to pay out claims. The first answer to this is as I just said, a
company will not insure someone who is too old, too unhealthy, or simply too much of a risk. The rates of these specific insurances, especially life
insurance, are based on age, health, and previous habits, such as driving and drugs (an example of this is a person who has 3 or more dwis/duis on
their driving record, they will be uninsurable). Then an entire other end of a (successful) life insurance company is that they have accountants and
bankers working with them. One way they continuously make money, and lots of it, is by keeping everyone’s policy amounts who are still living (this
is hundreds of millions to billions of dollars), and their premiums, in one hugeass interest account. So it’s money making more money for the
company.
So to sum it up for you, the only way a big life insurance company goes belly up, is if the economy completely fails (this would have to be worse than
a depression, it would have to be completely collapse). Or there is a mass casualty event like the country got nuked or something, which would most
likely lead to economic collapse anyways.
Hope I answered your questions clearly! I didn’t really understand the second half of your post about planes and roads but that’s ok! Be safe out
there!