In an insurance system, would you expect each person to receive in benefits pretty much what they pay in premiums or is it just that the average benefits paid will equal the average premiums paid?

An insurance system is a financial arrangement in which people pay a regular amount (called a premium) to a company, and in return, the company agrees to pay for expenses in certain situations (such as accidents, illnesses, or property damage). The main goal of insurance is to spread risk among a group of people, so that if something unexpected happens to one person, the cost is shared by the whole group.

Premiums are the regular payments that people make to the insurance company to participate in the insurance system. Benefits are the payments made by the insurance company to the insured person when a covered event occurs (such as medical bills paid by a health insurance company). The amount of benefit received depends on the specific terms of the insurance policy and the nature of the covered event.

In an insurance system, it is not expected that each person will receive in benefits exactly what they pay in premiums. This is because the whole concept of insurance is to spread risk among a group of people. Some people may require more benefits (due to more accidents, illnesses, or property damage) while others may require less or none at all. The premiums paid by all participants help fund the benefits needed by those who experience covered events.

In an insurance system, the average benefits paid will typically equal the average premiums paid. This is because insurance companies need to ensure they have enough funds to cover the expenses incurred for providing benefits, while also maintaining a profit margin. By setting premiums at a level that covers the anticipated average cost of benefits, the insurance company can both meet its financial obligations and make a profit. In conclusion, while it is not expected that each person will receive in benefits exactly what they pay in premiums, the insurance system is designed to have the average benefits paid equal the average premiums paid, allowing the insurance company to cover its costs and maintain a profit. This approach helps to spread risk among the group of insured individuals and ensures that the system remains financially viable.