8/14/2014

How does an insurance company make money?


When you are young and healthy, they sell you life insurance. And they win if you live long long till the expiry date of the insurance. So they pray you live long long and pay your premiums long long.
 

And when you live long long, near your expiry date, they sell you annuities. And they make money when you don’t live long long, for they need not pay you annuities for long long.
In the first case they pray you live long long. In the second case they wish you well.
 

Interesting thought from a blogger who made a comment in TRE. The blogger said the insurance companies actually placed a bet on your life in both cases. First case play long, second case play short.

Kopi Level - Green

23 comments:

Anonymous said...

Yes, they motivation is $$$$. Your interest is never theirs.

Anonymous said...

This cruel world is like that!

Anonymous said...

I bet that no Sinkie opposition party will ever contest 100 seats as one party like PAP and ready to be govt.

And I bet that this will be for long long and PAP will win elections for long long.

Anonymous said...

Not happy dun buy lah, nobody point a gun at u 2 beri

It's democratic

Even papigs dun point guns at u to put money into old fart pekkim account

Only codify it n onus on employees to koret upfront 2 guarantee your moilee for your comfort in your ether life
Vote for suck government, just ah... always vote papigs

Anonymous said...

No commercial entity exists to make no money(profit).
And yes, no one points a gun or threatens anyone to buy insurance.
Do not blame anyone when You do anything of your own volition.
Be responsible for your own decision.

Anonymous said...

Got compulsory insurance or not?

Anonymous said...

Anon 9.50am. // I bet that no Sinkie opposition party will ever contest 100 seats as one party like PAP and ready to be govt. //

Are you daft?

Any party doing that will end up in many 3 or 4 corners fight in several GRCs and SMCs with the incumbent and other parties?

Is it wise for that to happen in the first place?

Are you STUPID?

If not, are you an IB?

Obviously you are, rt?

Matilah_Singapura said...

Q: >> How does an insurance company make money?"

A: By doing complex math, then scaring the bejesus out of people to encourage them to "protect" themselves against adverse personal events by selling them a PROMISE for "protection" should the worse happen.

An insurance company takes over the risk, for a price. It SELLS by the best proven ways of "stimulating" humans to buy: FEAR & GREED.

Anonymous said...

/// An insurance company takes over the risk, for a price. It SELLS by the best proven ways of "stimulating" humans to buy: FEAR & GREED. ///

One of the few times I agree with Maitilah.

Anonymous said...

"Any party doing that will end up in many 3 or 4 corners fight in several GRCs and SMCs with the incumbent and other parties?"
Anon 11:28 am

100% tiok. And that's exactly how the 60% will shift their votes from PAP to the party doing that!

Vote PAP out? Yes, that's how, and also the one and only way.

Daft or not, IB or not, like it or not, that's the way!


Anonymous said...

60% Sinkies and many Sinkie opposition parties have already insured PAP long long from being voted out.

The said...

Can you insure against Ebola? Looks like the first case has landed on Singapore's shore. Female Nigerian 55 years old.

Anonymous said...

Is this the latest? If true, it is very scary. No where to run, no where to hide, akin to a nuclear fallout.

agongkia said...

I know of someone who pay PA premium for donkey years to A()A.Got an accident 2 years back and insurance agent cannot be found.Today still gong gong paying premium.
Last time agent every where talking about financial planning but funny nowadays never come across any agent selling life policy.

And you have those who call you and only want to sell you policy that they promote.
Ask them sell Workmen Comp.they say they will sell provided you take up other their insurance but never come back to you when they see your premium is too small, wasting your precious time.Can claim themselves Million Dollar Club some more.Is the Insurance Commissioner Dept still around.
Seems that after 5 years they lost interest in serving because no more commission to make.

Anonymous said...

Small time insurance agents will disappear when people can buy online bypassing them.

The said...

Ebola false alarm. Earlier report by States Times online said "suspect". Now, they said it is a false alarm.

http://www.straitstimes.com/news/singapore/health/story/nigerian-woman-sent-tan-tock-seng-hospital-does-not-have-ebola-says-hosp

Anonymous said...

Last GFC some insurance giants also almost collapse if not for the US govt bailout!

Come next major and bigger crisis likely by 2021, when the insurance companies are at risks of belly up, who will backstop them? Otherwise, after some COMPULSORY INSURANCE SCHEME inplemented at "gun point " ( cos people not given any other option ) and people already paid BILLION$$$$$ in premium in the first few years, what would happen to those that need to claim for medical services but these insurance companies could be insolvent by then when next big crisis hit?

By then who is around to hold the "baby" ?

Any bailout with tax payer $$$$$$ means the people are made SUCKERS twice? First time pay compulsory premium for a few years then tax payers $$$$$ use to bailout "insolvent" insurance companies hit by next big crisis?

Obviously when the people's interests are concerned, is there a proper think through by those purported to be on the people's side and making compulsory decision on their behalf?

Chua Chin Leng aka redbean said...

You have a point. Like I said before, with a compulsory medical scheme that encompasses every citizen, the govt should self insured to cut down on cost, profits by the insurance company and also to guarantee against an insurer going belly up.

Why is the govt not doing these?

Anonymous said...

"Why is the govt not doing these?"
RB 8:38 pm

Why? Only when u become leader of a party which can win 93% seats with only 60% votes in a GE, then u know.

Anonymous said...

/// Why is the govt not doing these? ///
August 14, 2014 8:38 pm

redbean
You and I from same generation of Singaporeans who would face down challenges and say "Why cannot do?"

Our PAP Millionaires are smarter than us.
They say "Why should I do if I can get somebody else to do it?"
That is why they get paid millions and we get paid peanuts.

And stupid Sinkies still continue to vote PAP.
Every fucking General Elections.
The stupid Sinkies keep voting PAP.
Sinkies deserve to be made extinct.

Anonymous said...

Redbean, I'm Sun Wu.

https://www.facebook.com/permalink.php?story_fbid=1394071427498665&id=100006874621937

Matilah_Singapura said...

@ all the scared hairless, big brained monkeys:

Just to show you how EASY it is to "activate" HUMANS (i.e. us!) fear response (a bunch of emotional processes) then use that fear to CONSTRUCT "LOGICAL" ARGUMENTS, which then influence the minds of other fear-ruled humans.

Knowing how to manipulate this uncontrollable mechanism is key in learning the craft of Human Manipulation (my field of work)

Also consider the cognitive bias known as the availability bias or heuristic: the human mind's tendency to use the most available "data" in the present. e.g. Ebola is in the news, and people are fearful/ worried/ concerned. Ebola has killed perhaps a few thousand people since its discovery.

This year, there are so far about 1400 cases with several hundred deaths.

Now consider INFLUENZA -- aka "the flu". The flu kills 250,000 to 500,000 people every year and occasionally there a pandemic, like in 1918 when influenza killed 50 - 100 million people.

But when you get the flu now, just get MC, ponteng work, rest at home playing video games or watching porn....yet, the shit can kill you, but you don't even consider it.

I must applaud MoH for being so polite and patient. If I were the minister, I'd come out and fuck everyone for being scared fear-driven monkeys who can't even manage their mind over the REAL RISK associated with viruses, but claim to be able to JUDGE what is good or bad for a whole fucking cuntree, and its government.

You motherfuckers are frauds lah. Go suck a bag of dicks! ;-)

Anonymous said...

Some Singaporeans are flame proof.
Some virus proof but carry germs
and some age proof and always
virile.
Maybe Sin is Ebola proof.