Originally Posted by
Art Mann
That proposition does not address the risk issue. In order for an insurance company to pay out anything, it must remain solvent and make large sums of money. It is not a ponzi scheme. The way they do that is to invest in the stock and bond markets, among other things. If they invest poorly, the company fails and the policy becomes worthless. If you paid for that policy, then you lose. So, you are, in reality, investing in the stock market indirectly whether you know it or not. Furthermore, if you pay $300,000 for a million dollar policy and then wait 15 years for the guy to die, then you haven't done as well as I have historically speaking. The amount you pay for a policy benefit is related to how risky and potentially long term the policy and company is. The risk is just obscured -- not negated.