How Do Insurance Companies Make Money?

Posted by Grace under Insurance on March 10, 2016

So you want to know how do insurance companies make money. Some of Insurance-Premium.Net readers are asking this question. Insurance industry in any countries especially in USA and United Kingdom is a very big industry. If you want to get rich, sell insurance but you need to be an expert on how to sell it since not everyone wants insurance.

Life insurance companies makes money through investing. How do they get funds? From policy holders, policy holders pay premiums. And the payment (money collected will invest wisely). They diversify their investments from low rick to high risk types of investments.


Low risk investments are bonds and treasury bills while high risk investments are stocks and mutual funds equity type. If insurance companies don’t invest their funds, how come they can insured many people that has face amount worth millions in total or even billions.

How Do Insurance Companies Make Money? – Collect and Invest

The trick is they collect funds through premium payments and in return they insured the policy holder. There are many types of insurance (from health insurance, life insurance, automobile insurance, homeowners insurance, business, travel insurance, etc) therefore, the more insurance offered, the more clients they can get and the more funds they collect.

See also, life insurance company. A collection of reviews and ratings updates of different life insurance company profile in USA, United Kingdom, Canada and Australia.

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