A Parable: Life Insurance

In the early 1940s a mother purchased $1050 in insurance for her son. The policies were paid up in 15-20 years. Over that period of time she paid $370 in premiums for the coverage. Had her son died it would have been a good deal. However, the son lived/lives. The cash value of the policies is now $612. Had she put the $370 in an account that just kept up with inflation she would now have $3610. If the son died today she would have lost $3610 - $1050 = $2560. If she chose to cash in the policies she would loose $3610 - $612 = $2998. There was no wrong doing on the part of the company. One must realize that the insurance company is betting the insured will live whereas the person paying the premiums is betting he will die.