Jim Cramer’s Best Stocks. But I generally do not encourage people to save for retirement using life insurance policies. Related Articles. The applicant is vetted thoroughly and key metrics like health, age, annual income, gender, and even credit history are measured, with the goal of landing at a premium cost level where the insurance company gains maximum advantage from a risk point of view. The Takeaway on How Insurance Companies Make Money No doubt, insurance companies have rigged the system in their favor, and keep cashing in as a result.