Answer :
Final answer:
Insurance companies receive money through premiums and investments, which is used to pay claims and cover operating expenses.
Explanation:
Money Out Payments to customers, expenses, and profits or losses are key aspects of how an insurance company operates. Money flows into an insurance company through premiums and investments and goes out through the payment of claims and operating expenses. For insurance to remain sustainable, the income generated must cover claims, company costs, and allow for profits.
Learn more about Insurance companies operational processes here:
https://brainly.com/question/33535135
When an insurance company needs to provide a payout, the money comes from a pool of funds. Insurance companies collect premiums from policyholders and pool them together to create a reserve fund. When a covered event occurs, such as an accident or loss, the insurance company uses money from this pool of funds to provide payouts to the policyholder according to the terms of the insurance policy. This pooling of funds allows the insurance company to spread the risk among many policyholders and ensure that there are sufficient funds available to cover claims when needed.
