How Can Life Insurance Companies Make Money? 
Great question ! The very , very simplified answer is this - they make money in some ways like a bank does . The money you pay in premiums acts like the money you would deposit . The bank invests it , and makes money off of yours . Insurance companies do the same thing . Both charge fees for their services ; and will charge interest on money borrowed . Insurance companies can also make or lose money on the length of the lives of the policy holders - if you buy a policy , and pay on it for 3 years , and suddenly pass , the company will take a hit . But if you have a small policy , and pay on it for many , many years , they have plenty of time to invest and reinvest that money , and make a profit . I hope that helps , if you still have questions , contact me , I 'd be happy to help . Thanks for asking ! 