How Do Companies Make Money From Life Insurance? 
Companies make money from life insurance premiums . If the number of death claims causes the life insurance company to pay out more than is brought in , the company needs to go into reserves to pay claims . That is why it is so important for life insurance companies to be financially sound , and it is also why underwriting for a life insurance policy usually requires an exam . The life insurance company is protecting itself , and its policyholders , by assessing risk accurately . 