By Dr. Steve Sjuggerud in DailyWealth:

The guys who run insurance companies must be complete fools...

Right now, insurance companies can only earn about 4% on their cash (10-year Treasury bonds pay less than 4% interest). But when you buy a guaranteed investment contract from an insurance company, they promise to pay you up to 7% a year for life.

So insurance companies are essentially earning 4% but paying out 7%. Please explain to me how losing 3% on every dollar you bring in makes sense... You can't explain it! It doesn't make sense.

Who in their right mind would guarantee you 7% a year worst case - for the rest of your life - and give you even more upside potential? Only foolish insurance companies. Here's how it works...

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