Life companies operate very differently from banks. As we have seen, each time a life company receives a premium, it receives an asset (the premium) but then has a  policyholder liability in respect of that premium.Typically banks will lend more than they have on deposit, so they will seek external funding to do this, and they will need to pay interest on that external funding.The idea of a “run on the banks” whereby depositors fear that banks will not have enough assets to cover the deposits, so they all try to withdraw their cash will not arise in the case of a life insurance provider.Every life company liability must have specific and suitable assets set aside to meet their liabilities. Each time a life company experiences a ‘withdrawal’, i.e. policy encashment or claim payment, its policyholder liabilities reduces accordingly.