The whole point of index funds is to insulate yourself from a single company failing. What happens when 1 of the 500 S&P 500 companies even declines is that it

The whole point of index funds is to insulate yourself from a single company failing. What happens when 1 of the 500 S&P 500 companies even declines is that it is substituted for with another, stronger company. Index funds are not static, they just sometimes appear that way.