Can you explain how life insurance works (in lamen's terms) ?

Can you explain how life insurance works (in lamen's terms) ?

So, say you have a policy with some insurance company. You pay a premium for, say, I don't know, $100 a month for a $500,000 policy. If you drop dead in 2 years, you'd have paid $2,400, but the insurance company pays out $500,000 to whomever is beneficiary? how does these companies stay in business? I mean, I imagine they have millions of clients, but it just seems like they pay out the a$$. what am I missing? Thank you

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