How does Aflac make money?

They're actually in the business of selling fresh duck meat. Insurance is just a sideline.

So, how often do you go to a doctor with an injury? One that is covered by your particular policy?

It's not free. You pay a monthly premium. I do not think Aflac covers doctors or hospital expenses, but rather they are in insurance agency that pays your non-medical bills while you are sick and unable to work.

The same as any insurance company - they have actuaries that determine the statistical chances that people will need $x amount of payout depending on age, gender, and other crap. Then they add on a certain percentage for risk and earnings. That is what ends up determining what you pay in premiums. Bascially they are weigh what they will most likely need to pay out (pad it a bit for potentially estimating incorrectly) and then add a % for their earnings.

They have been around since 1955, and have built up some capital in that time. People pay for the policies in the US and Japan, regardless if they use it or not, they sill pay there premiums. If the policies are not used Aflac does not have to pay anything out to the policy holder. If the policy is used Aflac pays a scheduled payment out to the policy holder. Aflac pays you cash when you get hurt and miss work. It is a pretty good deal.

I have studied several aflac plans. None of the ones I looked at made any sense to anyone except aflac, unless, for instance, you already knew you had some condition like cancer or something requiring hospitalization.

This is the most ignorant comment I have ever read on this board. "Doesn't make sense - unless you need it" WTF? And you came to this conclusion after studying it? What a moron.

Aflac, like all insurance companies, at least the ones that survive, do in depth analysis of the amount of risk they will cover and factor the amount of premiums that will be needed to cover their best guesses of the claims that will be filed plus their operating expenses. Their profit is the difference between the premiums collected and the claims paid plus whatever they can earn from invested cash. They gamble that they will collect or earn more than the claims that will be filed plus expenses.

When investments are lucrative, insurance companies can be more competitive by offering more coverage and/or lower premiums; however, when investments tank (like now), insurance companies can get serously burned and will likely bleed red ink for some time. And that's when you find your insurance company negotiating less coverage and/or higher premiums when you renew your policy.

If you're not going to quote accurately, probably best not to quote at all.