Life Insurance

aka The Good Samaritan?

I had an interesting conversation yesterday with someone that made me delve into the world of life insurance. They said that one of their old, from childhood policies contacted them and offered them a free cancer screening blood test. I will assume that it is this one: Galleri

I could not figure out why life insurance would start offering long time clients a $1000 test for free for early cancer detection. This of course sent me down the long spiral of google.

Every information I found was like this one: https://insurancenewsnet.com/innarticle/how-early-cancer-screening-benefits-life-insurers-and-policyholders

It is all very glowing positive news about how you can help your customers live longer. No shade to life insurance companies, but they’re a business, why would they do that, how does it increase their bottom line. As far as I am aware everyone is still going to die and the test cannot be given BEFORE you are their client.

Here was my conclusion about why it might benefit them as much as their client. The longer the client lives the less their policy is worth. If my mother got me a tiny little policy in 1964 and paid for it monthly until you reach the maximum of whatever, let’s stick with the $1000 in 1974, by the time I die at the average age of say 75 that $1000 is worth a whole lot less and by revenue for the insurance companies will cost them much less AND they have the benefit of having that money to invest and gain revenue on for 75 years. So the longer they can hold onto that money the more money they can make from it. Someone somewhere must have run the numbers and figured out risk/reward on this one.

I think there are probably also some percentage of people that will cash in their policy for a lower dollar amount, so the longer you are alive the better the odds that you will need that money and look into cashing in one of those policies.

Or Life Insurance companies are all just doing their part to be magnanimous and friendly.