08-16-2009, 02:13 PM
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#222 (permalink)
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Who You Crappin?
Location: Everywhere and Nowhere
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Quote:
Originally Posted by Rekna
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).
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they already do that, but the $400 goes to the CEO/stockholders instead
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