Quote:
Originally Posted by rahl
I'm not clear on what you mean here. If Insurance companies refunded any unused premiums because you didn't have any claims that year, there would be no money for them to pay out other claims, so that really isn't a realistic option
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They refund premiums on the whole not to the individual.
Let me give you an example with some simple numbers (aka not realistic):
Let's say an insurance company has this plan A. On plan A there are 1,000 people. They each have a premium of $1,000 a year. Each year they take in $1,000,000. Let's say the % requirement is 90%. Then the insurance company must pay out $900,000. Let's say this year the insurance company only pay's out $500,000 in insurance claims, then they are $400,000 under what they must pay out. Thus each person would get a refund at the end of the year for the difference: $400 (400,000/1,000).