Insurance companies- How do they get people to buy insurance policies?

When an insurance agent talks to me, I'm not comfortable talking about disabilities, surgeries and death. He doesn't know me well enough to be talking to be about such topics (considered quite personal in India).
So how do Insurance companies make money? Their whole model of making money is to sign up lots of people for insurance and pay for a small percentage of the signed up people's costs. But if you have difficulty getting one person to buy your insurance policy, how in God's name do you get thousands to sign up?
Simple:
Give a referral fee! You've done the hard work with one person who bought your policy. Now let him do your hard work for you. He will have a better chance of getting his friend signed up since he knows his friends financial and personal situation, but an insurance agent will try to build a relationship from scratch, try to sell (over sell) his policies,etc.

For every person that signs up for an insurance policy, you pay the referee a percentage so effectively the referee's policy costs are brought down and the insurance company's success ratio goes up.
Makes sense?