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The insurance company then gets the rest of the money from the reinsurer.
Furthermore, reinsurance makes it easier for you to get insurance since it allows the insurance company to pass some of the risk on to a reinsurer.
If the insured makes a claim on his life insurance policy, the insurance company then makes a claim with their reinsurer.
The insuring company will use this to have a limit of how much they pay toward a claim before the money from the reinsurer kicks in.
The original insurance company has likely purchased reinsurance so that after the first $100,000 of a claim, the reinsurer pays the rest.