Save this article
Use this article for free on your own website
Republish this article for free on your own website or blog. Or search or browse for more articles that your audience will appreciate. Huge choice available. Ideal for finding quality, free content. Read our publishers guide.
Do Life Insurance Companies Steal Your Money?
When it seems as though life insurance companies are getting richer and richer it seems logical to question whether you should be adding to their profits. You are not the only one asking this question.
When it seems as though life insurance companies are getting richer and richer it seems logical to question whether you should be adding to their profits. You are not the only one asking this question.
It’s almost impossible to defend any major corporation. So in reality the question should not be whether insurance companies are actually taking advantage of people but rather are insurance companies providing an important service for people? The answer to the first question, of course, is yes they are taking advantage of people.
It does not take much common sense to realize that most insurance companies could do what they do a lot cheaper but that does not take away from the fact that for most of us life insurance is an intelligent purchase. In its simplest form life insurance takes the pooled money of a large group and uses the proceeds to keep individuals from financial hardship. Although insurance companies typically do better then individuals that does not automatically mean that it is a bad deal for you.
I think that in practical terms it is best for us as consumers do not concentrate on how much profit the typical insurance company makes each year but instead focused one how a life insurance policy will benefit us in spite of the insurance companies.
Yes it is true that the only way someone benefits from a life insurance policy normally is through a death but unselfish love looks past the punch line and sees how it will help the beneficiary of a life insurance policy. Unless you are able to actually live to be 100 years old it is extremely likely that your beneficiary will receive more money from the insurance company then what you paid into it in the way of premiums. If the value of a life insurance policy is $500,000 it is likely that the premium payer spent all whole lot less than that for this financial protection.
For the average person is probably to say that it is usually in the context of marriage and a family that we talk about and consider the purchase of a life insurance policy. While most families to have two or more sources of income it is still true that because we live or one each source of income in the absence of one source of income through death will still work a financial hardship one the other.
As with most financial decisions in life we usually come out ahead when we are dealing with individuals as opposed to large impersonal corporations. As we have become more intelligent consumers in the society and take more responsibility for our financial decisions we are less likely to be dependent on the so-called welfare of a large corporation. It is better for us to deal one-on-one with people from our community. This is when local independent insurance agents do the best job.
As to whether life insurance is a big rip-off I guess the answer depends on your point of view. Yes, many insurance companies do make insane profits from year to year but, on the other hand, it’s very difficult to turn your back on the concept of sometimes only paying a few hundred dollars in premium payments in exchange for collecting hundreds of thousands of dollars from an insurance company.