Explains how life insurance companies manage premiums and surplus funds, using an example of a policyholder (“Vern”) to show that insurance companies engineer policies to create surplus profit and maintain tax-exempt, efficient capital management. Describes profit-sharing mechanisms and how policy structure preserves tax advantages.
The life insurance company might look at.
That and go, hey, you know, Vern's 39 years young. We have this much death benefit. He gave us 10,000 bucks, and we have a duty of care to put that money to work. But, you know, the actual cost of insurance, it should have only been like two grand or five grand or whatever. So now there's a surplus, which helps produce more profit.
Which helps them share.
More of that profit with me.
It's just the way that the policy.
Is engineered partially to.
Help keep that.
Tax exemption.
To keep the whole system.
Efficient, regardless of what I decide to put into my system. Isn't that money, Isn't that capital needing to be deposited somewhere? Right. The insurance companies are incredibly efficient at how to manage this money and how they structure the whole system so that it does stay efficient and stays tax exempt and so on.
So if we're contributing more to the.
Insurance company than they actually need, then wouldn't that be a pretty good way to create an engineered outcome to ensure that the insurance company continues to be profitable?
