Private Carrier

  

Categories: Insurance

You own Slathers, a biscuits and gravy fast food chain with hundreds of locations. Every day, you ship tens of thousands of gallons of gravy between distribution hubs, where they are sent out to your various individual restaurants.

Rather than use a trucking service, you have your own fleet of gravy tanker trucks. That makes you a private carrier (as opposed to a common carrier).

You have a transport network...but you only use it to ship your own goods. You don't rent out your tankers for oil or mayo or whatever. You're not a transportation company. You're a gravy fast food chain...one that happens to own a fleet of trucks.

Related or Semi-related Video

Finance: What is whole life insurance?6 Views

00:00

and finance Allah shmoop What is whole life insurance Well

00:07

if health insurance is a safety net for your health

00:11

then guess what life insurance is yet a safety net

00:14

for your life I e In case you die which

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unless you found the fountain of youth or a genie

00:19

in a lamp well it's gonna happen sometime with life

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insurance There's the owner of the policy who is from

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usually also the insured You know the person whose death

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makes it rain money The person who would get that

00:32

money is the beneficiary And of course there's the insurer

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the life insurance company who takes your money every month

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They're also the ones that cough up a lot of

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cash when you eventually bite the dust Well whole life

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insurance hole there with a W is a type of

00:48

permanent life insurance That kind of investment E It's permanent

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because it follows you for life like an insurance of

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Grim Reaper you know always lurking in the shadows You

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know whole life insurance was born from its mother term

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life insurance and back in the day when life insurance

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was just getting it start in life while term life

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insurance was the only option Like you'd pay fifty seven

01:09

bucks for a month's worth of a million dollar life

01:11

insurance policy in your twenties if you didn't die that

01:14

month Well congratulations But then the insurance company kept all

01:17

the money you just gave them and then it would

01:19

start all over again the following month For the insured

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life insurance can feel kind of like a lose lose

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situation If you live well you're making payments that go

01:29

into an abyss and if you die while you're dead

01:32

But at least your kid or mom or whoever the

01:34

beneficiary is has some money Well life insurance buyers got

01:37

tired of this term life insurance gamble every month losing

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all the money they gave to the insurance companies So

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they began Teo What's called Oh yeah think And then

01:46

using the power of frighteningly large groups will they began

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to invest the money into markets with like a thirty

01:53

year time horizon No more giving over of all that

01:56

fifty seven bucks every month to the insurance company watching

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all the money go down the drain As you might

02:02

imagine the life insurance company's weren't very fund of people

02:05

getting smart on them investing their money for insurance instead

02:08

of dropping it into well you know the insurance black

02:11

hole So they decided to cut a deal with those

02:13

wanting to be insured They said We'LL cover you for

02:17

three months instead of one If you fall off a

02:20

bridge or get hit by a bus while your wife

02:22

and kids will be seeing a cool million dollars and

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then they said will invest half of your monthly premium

02:29

in an index fund Yes we'LL even let you choose

02:32

which index fund we put it into and the other

02:34

half Well we get to keep And if you want

02:36

to back out and terminate the plan not because you're

02:39

in a wooden box but because you ran out of

02:41

money or moving or something Well you can keep eighty

02:44

percent of what's left in that pot Well this whole

02:48

structure for the revolved into what we have today whole

02:51

life insurance which covers you not for one month or

02:54

three but for life Remember it's permanent You could still

02:57

cancel payment or future payments but it would cost you

03:01

a pretty penny Whole life insurance includes building up savings

03:04

from part of your premium payments not watching all your

03:07

premiums go into the insurance black hole Since whole life

03:10

insurance is permanent it acts as a no touchy investment

03:13

account And because it has high fixed payouts when you

03:16

die well it's super expensive In essence Ah whole life

03:20

insurance plan is a tricycle style a handhold the investment

03:24

vehicle that tries to pull a Miley Cyrus right getting

03:27

the best of both worlds For those with the cash

03:29

and discipline and the ability Teo stay alive that we

03:32

watch out for that bus You can replace the need

03:35

to even have a whole life insurance policy by simply

03:38

buying your own shares of an index fund or mutual

03:40

fund all on your own with no insurance company middleman

03:43

taking a cut then you own one hundred percent of

03:46

the investment and all that's left to do after then

03:48

is you know not die for a decade or three

03:51

Enjoy your loot

Up Next

Finance: What is Life Insurance (Term v. Variable)?
45 Views

What is term life insurance, and variable life insurance? Hit play to find out, and, uh...let's hope you live long enough to figure out the answers.

Find other enlightening terms in Shmoop Finance Genius Bar(f)