I was thinking, if life insurance companies use customer premiums to basically help payout when there’s a claim. I think companies typically have reserves that they use to pay out on claims, but they can’t rely on that alone and premiums are needed to sustain the company after claim payouts.
But this model assumes pretty much a standard rate at which people are dying and at which people are buying life insurance.
If you consider the concern that our population isn’t growing fast enough, and that soon there will be a disproportionately large retirement class compared to the working class (people who would be paying premiums), it seems a valid concern to question whether life insurance companies in 15-25 years will have enough incoming premiums to sustain their models and consistently payout claims 🤔
