How Do Insurance Companies Invest Their Money?

Video Transcript

"Hello, my name is Vic Schumacher, the company is HPE Financial Services. The question was asked, how do insurance companies invest money? The answer is very simple. They invest money in stocks and bonds, they invest it in other real estate holdings, they invest it in precious metals and coins. But the bigger question is, why do they invest the money? They take your individual premiums and make those investments. They are a business. They make those particular investments to cover whatever claims that might exist on the policy, they also make that investment for their own business return. And that investment return must also handling the operating expenses of the company itself. There are strong companies that do this, there are weak companies that do this. It's just a business decision. But the investment of the principles is the key factor. These insurance companies have got to guarantee the principles which are the premiums that are paid by the people, in order to keep them in existence and keep them going. The insurance companies themselves look for your premiums and through customer service will maintain you as a customer. My name is Vic Schumacher, the company is HPE Financial Services, helping people every day."