Insurance Explained - How Do Insurance Companies Make Money and How Do They Work
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- čas přidán 20. 05. 2018
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How do insurance companies actually work and how do they make money?
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Have you had good or bad experience when filing a claim to the insurance company?
Lmao 2 likes
The Infographics Show But what does a gecko have to do with insurance though
Oh wow thats sad you only got 5 likes pahah
Bad. Always bad... Someone ran a stop sign last month and T-boned my car. The damage was totaled they're giving a whopping $3,000 for 2008 Cobalt that only has 121,000 miles and NEVER a single thing wrong with it! They also just randomly raised my premiums (before the accident) despite the fact I haven't had so much as a traffic citation since 2011.
Yes. Health insurance didn't pay an emergency room trip. $695 was insurance cost. Mine? $3200.
This is the type of stuff I wished I learned in school. Thanks Infographics Show!
Angelisa Craig
Depends on what you are learning
I'm studying commerce
They teach me this
Its very interesting
Very true.. In school they don't teach us what we need to know in future
Waleed Al-Khalil They definitely do you just need to sign up for the right classes. Instead of taking woods class take IT launch or economics.
HockeyPlayer but this is something everybody should know...
HockeyPlayer they don't have classes like that in my high school.
Does Lightning McQueen have life or car insurance?
Holy fuck
Both. Car (AKA health) insurance while he is alive and life insurance for when he dies.
Damn. That's a good one.
It's like saying do people have human insurance or life insurance? Same thing just in different wording.
Insurance is ?
How do they make money??
Ans. They take your money, and then refuse to pay!
Sounds like someone should have read their policy, coverage options, conditions and declaration page.
OppressiveStraightWhiteMaleChristian
even if the average person had that time to do so, companies can deny valid claims knowing u dont have the time/money to go to court and even if u do and win, it's worth it cause usually the percent of people who can/do go to court n prove they are right is nothing compared to how many they screw over.
EDIT: insurance companies should be non profit or else they violate usury laws and greed laws found in all major religions including the Bible
So, you have never heard of a mutual company? Insurance companies don't makes loans, ergo they don't charge interest and are not participating in usury. Shucks, if taking claims to court works so well and makes so much financial sense, then why don't insurance companies just make all or most their claimants take them to court?
Also, how long does it take for a person to read their policy, coverage options, conditions and declaration page?
OppressiveStraightWhiteMaleChristian
Isnt making money off of money usuary?
why not answer about greed vs. non profit insurance?
when did denying OR settling/going to court become making money off of court cases? why ignore the denying valid claims, and twist my words?
I dunno....read an entire policy/options/declaration page and time it. i help people through faith based charity with minimal overhead costs to get coverage, and i should clarify it's easy for me, but not for most people, and the real hard part is all the legal games they play in order to deny claims such as rescission (though this happened more before the ACA i guess).
can you discuss about how stock exchange works?
Beautiful Squidward The Infographics Show ... and whether it {hypothetically} be changed to use Intellectual property as value instead of currency to measure each country's wealth {and it still work the same way}. 🤔👨🏫💱💡📈📉ℹ
username1nmillion
Interesting emoji choices.
@Beautiful Squidward I support this request
Easily simplisticly put the way the stocks are exchanged is. You attempt buy x amount of stock that is worth y amount and a stock broker looks for some one who is selling the same amount of the same price and you exchange owner ship of the stock. How the market fluctuates and other things like that is a bit more complicated
Legalized Ponzi scheme, for most cases.
"How do insurance companies make money" more like is it even possible for them to lose money
Mat Holliday Oh Yes, that is why there are rating agency that provide financial ratings on carriers. Many go insolvent each year. Reinsurance as they mentioned is the key.
Mat Holliday it is. When 4 hurricanes hit Florida in 04 Citizens had to have FEMA intervene cause it couldn't pay out all the claims.
Years and years of taking in money, rarely paying anything out in claims, then they couldnt pay all their claims, I wonder why......
It’s generally hard for them to lose money year to year but all at once is the constant worry. Think about your home insurance, you pay maybe 1% if it’s value a year and then every house in your area suffers a disaster after five years. A small insurance company or a stupid large company can be ruined in an instant
Its like a legal ponzi scheme. The insurance company takes money from you to pay other's claims. However, if there is a big disaster, then they usually will not have enough money to pay back all the claims. Also, they tend to invest the money to get a nice return, but they usually use that money to pay employees or else who would run it? They also pay for ads to get more clients (bigger pool of money) and buildings, websites, Etc. It's pretty hard for them to lose money, but it has happened during natural disasters.
As someone who studies insurance law in the UK, this is quite a good summary for the average person. Good job
Thank you! 🧡
+Cleander Yu
How complicated can it get?
I mean, its not rocket science, it's just a scheme of spreading risk and coming up with complicated terminology and policies, and raising premiums when someone tries to claim their insurance.
@@TheInfographicsShow What does an insurance company have to get approved for by the government???
Successful people don't become that way overnight. What most people see as glance wealth, a great career is the result of hard work and hustle over time. I pray that anyone reading this will be Successful in life..
@@jasminewrites4629 You're right
The amount of time we spend believing we can't is more than enough time to learn how you can.
- my Brain
2021 online stock is just difficult and unbelievable, I'll rather invest my money on crypto
People are ignorant of the profitability in bitcoin Investment and that had been their major issues limiting their Investment
@@mariaprice4725 Nice words 👌
For real it's true this could be the wisest word I've heard, you got my point
Nice words especially with the current rise
I work in insurance and I learnt something from this! Makes me laugh when customers demand to talk the underwriters though lol
why not? if someone is in a financial bond with me, be it insurance, savings, investment or otherwise, i'd like to have a direct contact with them..
'remove the middle man'
cut-through clause
Dump a box of documents in their laps and tell them to knock themselves out
@@alexnicolaou3579 not happening
@@jaleelzare9290 agreed
Great explanation. Been in the industry almost a decade and believe you introduced the concept wonderfully. Thank you for making these.
let’s also not forget to make those investments too… as we pay for those insurances.
I'm so happy i made productive decisions about my finances. Bought my second house in September last year and hoping to retire next year at 52 if things keep going smoothly for me.
@Cordero WOW, pls share some tips on how you achieved this beautiful feat, I would appreciate
@@adrienclaeys294 I have a very diversified investment portfolio and I employ the services of experienced portfolio managers to ensure maximum returns and minimal loses.
@@jennyr.cordero2018 I want to invest, pls how do I reach out to your manager?
My city was heavily flooded a few years ago. The insurance company refused to pay for 3 of my cars. That's how they make money. Nice video though.
sue
If u have more than 3 cars u don't need their money
Those 3 cars could easily be under 10k each, one for him, one for his spouse, one for his child , you can’t just assume he’s rich
George Bush I don't have kids or spouse...also I'm not super wealthy. That's why I complain about insurance companies not paying for my cars
jade silva those cars are passed on from generation to generation. Now it's totally gone. I don't need 3 cars
When I think of insurance I think of that scene from The Incredibles where Bob threw his boss through multiple walls because he was getting yelled at for helping an old lady get through all the house insurance red tape.
I have to know a lot about my insurance just to keep my own personal health coverage but Mr. Incredible gives me hope while I'm on hold for like 2 hours on the phone with the agency.
I have health insurance to look out for the expected 😂🤣 I wish I felt as young as I am.
You know how it goes we pay them they give us protection worth less then what we pay...
The Entity this comment deserves respect.
Don't pay then
And then after all that they turn around and deny your claim outright.
Tommaso Pizzino exactly why would u pay if they don't pay back equally and what's the point even thought u get back what u payed
Dark Tronics grammar good
$100 for a phone, what year are we in
2010?
Kioerrr thats not what he said 😞
my smartphone cost 65$
Coreytime what is the smartphone name?
Eryk Konieczny Nokia brick
Kioerrr you can actually buy some OK smartphones that kind of work for $100.
Here’s how they make money. They charge you high insurance fees for years. Then when you have an emergency, they find reasons not to honor their contract, and they don’t pay out anything. Then, they charge you more for insurance simply because you had an emergency and you reported it.
Smoothest, transition to a sponsor I have seen in a minute 😂
I've paid more in insurance than I've collected. But every time I've collected, I wasn't in a postilion to comfortably pay it outright myself. I like to tell myself I could have just saved the money I was paying for those situations. But my Savings account is like
" Come on buddy..."
Dont worry a major disaster is coming.
The best idea is to have a decent savings to pay for small stuff out of pocket, and only insure the big stuff. If you drive a beater, there's no point insuring the car itself, but you should insure against crashing into a brand new Mercedes (3rd party insurance).
@@Andy-em8xtyou don’t have a choice tho of course you gotta insure
The last five minutes blew my mind. I think the selling premiums to use for higher interest returning assets is genius. Insurances are the forefarthers of the passive income everyone wants. Literally having even a small slice of this scheme will set yourself in good standings for the rest of your life! Thank you for the information. I'm saving this video
Its basically just a Gamble then?
more like a bunch of gambles put together
Fire Gamer and gambles where you [insurance companie] can decide what the odds are.
Fire Gamer yes if you take a very broad definition of gambling. For example, the Amish are exempt from paying social security tax (American pension) because insurance is against their religion as a form of gambling, and it's legal because their communities have their own way of making sure the elderly and sick are not destitute.
It is kind of a reverse-gamble: you will always lose money, but always a predetermined small amount,
whereas a gambler hopes to win money, but how much they win/lose is inherently random.
In essence, the insurance company is gambling its money on safety, with odds being in their favor. This works because of the law of large numbers, kind of like how casinos profit.
In other words, a gambler can act as insurance company, although it's not very exciting to sit and wait a whole year for a building to (not) burn.
Not really. An insurance actuary calculates risk using statistical analysis, financial theory, and mathematics such as upper level calculus and linear algebra. It pays very well though.
Do more of these type of videos
Ropsana Khanom great. Me too
agree
I earned my life health and accident insurance a few years ago but left the insurance business. Watching this video I was glad I was able to remember how all of this worked before pressing play. I was beginning to think I lost that information.
These videos are so freaking interesting, I love them. You have one my subscription Infographics Show, awesome. Keep up the good work!
Great video as usual!! Love the simplicity of how you explain everything!
I really like how they can explain this so much better and clearer
Historically you might want to consider the Renaissance as the time period where insurance started. In particular long-distance trading Mediterranean cabotage. In fact the Dutch East India Company was, before its consolidation as a company, a merchant insurance business where over 1000 people acted as insurers. This puts the creation of insurance as a business somewhere between the mid-15th and early-16th century.
You omitted to mention that back when insurance was founded in the coffee houses of old London, that business was typically done on only a single hand shake. On the basis that your word is your bond. It was not until much later (when I imagine when some people had renegade on their words and decided to get into politics instead) that contracts were drawn up. Now days could you imagine doing business on a hand shake, many people including a few politicians in high office, I could mention, would not be trusted to honour their word. Still at least it has created plenty of work for lawyers and will continue to do so.
This was very well explained. Thank you!
Skillshare is a loyal sponsor 😂
Xxx Tentacion wix is kind of new it still needs to earn respect honey on the other hand
@@thatonepriest69 What does an insurance company have to get approved for by the government???
@@tacobell2566 so they don’t bs us too much. The us government wants to keep a close eye on how much bs they can pull
Oh man, that was a real good joke when you said that insurance companies are offering the lowest prices they can XD
I'm still laughing!
What’s really funny here is how cheap you are.
Blood Beryl you're probibly a 10 year old that doesn't need insurance and has no idea what you're talking about. Well not probibly, you are.
@@orppranator5230 You don't know what they're rates are so you can't assume that they are being cheap.
Your videos are interesting and make me fall asleep easily
that is the most true contradiction I've ever heard
This answer my question, thanks The Infographics Show.
This has been so insightful, thank you very much! 😃
I love these business videos!
This was very informative. I’ve always wondered how medical insurance companies pay & earn money, I once assumed that people don’t get sick enough including myself.
Thank you this was very helpful and informative 👍👍
Awesome video!! Thank you!
I started working in insurance at 17 and the company I work for writes Lloyd’s so it’s cool to see how many views this has! Although I have only been in insurance for a year, I can’t stress how much it is not a scam! I’d like to hear you say that after you go to the hospital in a different province and get a bill in the mail ... lol
@@NeverRnBbro what does it mean to be investing premiums in a high interest investment scheme.
You know the biggest scam tho? When it it's not your fault and there way you could have know some idiot was going ton hit you. But they still raise your payment.
I like how the picture of the Great fire of London nearly 400 years ago shows a telephone box
Great video, very informative!
Wow very useful video. I love this channel because of the graphics, voice quality, & content! Please make more videos about business or self improvement! Which can be used in real life
That editing error at 52 sec is interesting.
A good high level description of the industry, a couple of slight misstatements, curious on your sources of information for the video? - Marine Cargo Underwriter in the UK
Infograph stay pumping out good videos!!😀😁
Great video! Thanks for sharing.
Probably worth adding that the investments tend to be conservative (bonds, blue Chip stocks) because insurance claims can be so volatile (earthquakes, tsunamis, market crashes) and your final cost is never really known.
Warren Buffet loved long tail claims (liability insurance) because you pay the claims latter meaning more money to invest and if they underwriter was prudent then the profit is essentially free money to invest.
As an insurance broker, this is very accurate!
Hulk Hogan 😂
This was so helpful, these are the type of stuff i wish i learned in school
I have always wondered this thanks!
Daddy B The Infographics Show I haven't. I already knew *MOST* of this except for the history part explained and what an "Under-Writer" is. 😕🙋♂️ℹ🤝👨🏫
Can you do a video on how to purchase stock correctly? I am interested in doing it and everything I read online confuses me lol
Easy they don't cover your claim for x amount of reasons. People will avoid making a claim because the premium will go up and you still have to pay a deductible
D P
U don’t know what you are talking about
Thats bad insurance
That's how insurance works.
X amounts of years no claim's insurance rewards you with cheaper insurance.
If someone totals my car, it'd be cheaper in the long run if I just cancel my insurance as if I made a claim to get my car fixed, my next quote can be 30 percent higher lel
@@tadasj.1152 Go on...
I like your video presentation. It is informative too, at the same time. Thanks a lot for your guidance!
exactly the information i was looking for
Insurance is what you should be doing for yourself by creating an emergency fund but by all means, live on the edge and hope you don't die.
My dad said i got life insurance so i basically can't die everytime i die i get reinsurance and i come back to life lucky mee!
FearFullPlays I hope you’re joking.
Hope your dad got Term life insurance. If he has Whole life or those weird names. You need to replace that policy immediately
I lyke your dad he is funny
that cleared out SO many questions.
This channel makes me love something.....
INFORMATIONS!!!!!
This is my only experience with insurance company:
"We're supposed to help OUR people, starting with our stockholders, who's helping them out?? HUH?"
😂😂
Incredibles.
Early notification squad where you at!?!
joey brown here! 🤗
Very informative and knowledgeable 🤓
How have you managed to make insurance become so alive, so vibrant and full of flair? Fantastic presentation!
0:52 “personal or business lol”
First, they pool the money to pay claims. Second, insurance companies pay for expenses involved in selling and providing insurance protection. Third, insurance companies invest money. Earnings from investments help keep down the cost of insurance to policyholders.
This has made my little life sooo much more clear now, thank you
A person below recommended you doing a stock exchange video and how it all works - that would be very interesting!
Bribe is to lobbying as ponzi scheme is to insurance
Wow never been this early before what joke should I put?
My life insurance
Hilarious... because it's true :c
Aah, good joke. Thanks :D
Nice explanation on how insurance works and the history of how it developed.
Good video you've been getting better since I subbed at 70k
*Skillshare = Wix = Honey*
64 views 64 likes 0 dislikes
All of them use wix for sure
matteo zilioli actually I saved with honey
Good thanks for your shaering
Thank for sharing
The lizards give them money from a planet in another universe.
Chiken help My suspicions are confirmed.
I'm too early I don't even know what to comment :(
Go to sleep.
that was a year go. Time to wake up
So good thanks for sharing
I would enjoy more informational videos regarding how things operate
Insurance is a scam. Its like gambling they have a mathematical formula that they use to make sure they make money overall. Even worse the government requires you to have it. Which is unconstitutional.
You don't really want to win in that bet though :D
Actually insurance is a necessity whether you like it or not. People don't buy insurance because they expect to gain from it in monetary terms - your expected loss is normally greater than zero. People buy insurance because, generally speaking, they are risk-averse and it makes them 'feel' safer (in theoretical terms, it increases their expected utility). Risk-averse people are partial to certainty over uncertainty and would rather pay over the odds to secure it.
My ex colleague asked me before? Which part of your body you wanna insure?
so basicly, a lot of people profite from one's missery, with no work done, bigger companies that is
they're not profiting from anyones misery. They're helping people pay for huge financial losses. They're not charities they don't just give out money for free because your stuff is destroyed. that's YOUR stuff that you are responsible for why should anyone else but you pay for it? we are lucky to have insurance companies that have figured out how to cover it.
@@jonahb3520 right
THANK YOU!
It was really complicated but u people explained it very well.
Paying for every lost phone, huh? Prepare to lose every penny you have.
Misfortune Follows That was only an example. I never heard of phone insurance before
imaginationNone
Easier said than done for some, my fellow intellectual.
L16htW4rr10r that’s what ‘Apple care’ is if you’ve bought an iPhone. Idk if Samsung or android has similar policies but I’m sure they do
Only phone insurance I had at one point in time didn't cover it being lost or "fully submerged." Covering a lost phone would be stupid because at the end of the contract everyone could just "lose" their phone and get the value of it given back or a new one. I'm guessing fully submerged either means you can't say you dropped it in a pond, effectively losing it, or so you can just drop it in the toilet at the end of your contract and get a new phone. Phone insurance is pretty garbage from my experience, just by the nature of it not the companies exactly, you're better off using a suitable case and being careful.
L16htW4rr10r i have phone insurance
How does discord make money?
by selling your data, no shit sherlock
They claim by selling merchandise and offering paid services for more Emojis and stickers and stuff.
Data mining
they dont, stated in their privacy policy that they dont
Thx Infographic, you are the Wikipedia of CZcams 🖒
Thnx again , now I got a clear picture , thnx once again
Kinda sad to see your paycheck shrinking by like 40% because of all the insurance, but better than not being able to pay for an ambulance
Draz'Gul my friend made the mistake of taking an ambulance once, had to pay 1500 plus some extra fees for a 10 minute ride. He didnt even want to get in as well but they made it sound mandatory
You wet me not my curiosity
Destin ToWin xD
Good thanks for your share
Great explanation
can insurance have insurance?
MSDLF *Top 10 Questions Science can't answer*
But is *Math related to Science*?
Yes. It's called reinsurance. The insurer insures the risks they're carrying themselves with an external company.
Yes then reinsurance has retrosession, the risk is spread throughout
i don't think insurance is good, there's just something dishonest and greedy about those companies.
The only insurance video that I actually find interesting
Thanks for the vid and also skill share is actually really helpful you guys should try it out
They cheat you out you money btw read bull do not give you wings
you might need that later :D
They just rob you from it!
As a training actuary i approve this video.
Thank you
Sounds like a scam
Howie Davis it is.
It is.
Insurance is a joke.
Yea until a random dipshit driver rear ends you that you could have never predicted was going to at the current time
Everyone complains about paying insurance until they have a claim, then they complain about not having enough insurance.
Wait Till you have a cancer.
Than you wish you be my client😂
Okay edit, insurance is still a joke.. 🤦
This is why I subscribed ur channel 😃🤗
thank you