how can an insurance company make a profit by taking in premiums and making payouts?\nthe value of the…

how can an insurance company make a profit by taking in premiums and making payouts?\nthe value of the premiums the company takes in is higher than the value of the payouts it makes.\nthe value of the premiums the company takes in is equal to the value of the payouts it makes.\nthe company only makes payouts from a pool of funds, not from individual premiums.\nthe company issues its policies to individuals who are unlikely to require payouts.

how can an insurance company make a profit by taking in premiums and making payouts?\nthe value of the premiums the company takes in is higher than the value of the payouts it makes.\nthe value of the premiums the company takes in is equal to the value of the payouts it makes.\nthe company only makes payouts from a pool of funds, not from individual premiums.\nthe company issues its policies to individuals who are unlikely to require payouts.

Answer

Brief Explanations:

Insurance companies profit when revenue (premiums) exceeds costs (payouts). If premiums are higher than payouts, there is a profit margin. Equal premiums and payouts mean no - profit, using a pool doesn't directly explain profit, and issuing policies to low - risk individuals is a strategy but not the core profit mechanism.

Answer:

The value of the premiums the company takes in is higher than the value of the payouts it makes.