New York – Rabbi Horowitz Analyzes the Arevim Life Insurance Program

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    New York – A week ago, Rabbi Yakov Horowitz, Director of Project YES, and a lifelong tireless advocate for children, reached out to the leadership of Arevim Life Insurance Program in a respectful manner voicing concerns that he had with their program. (Details and background of their exchange can be found here .

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    Rabbi Horowitz wrote a letter to Arevim last Wednesday and received Averim’s response today.

    Both are posted on his website, and can be reviewed below.

    VIN commends Rabbi Horowitz for his efforts and the respectful manner in which this was done. Its up to the readers to decide the value, or critic about this organization. VIN is asking our readers to maintain a dignified tone in all comments that are posted on this thread.

    A representative of Areivim.info emailed VIN News stating that the program Kol Yisroel Areivim is not affiliated with them.
    —————————————————————————————————————————————————————

    Rabbi Horowitz writes:

    —————————————————————-

    29 Iyar 5770

    May 11th, 2010

    Reb Yoel Bochner

    Director, Areivim

    Dear Reb Yoel:

    Allow me to begin by thanking you and the other leaders of Areivim for your efforts to insure the breadwinners of our families and to avoid the dreadfully humiliating public campaigns for widow(er)s and orphans whose parent passed away r’l without life insurance.

    Due to my first-hand experience with losing a parent at a young age, I have always had very strong feelings about the importance of parents having adequate life insurance to provide for their children in case chas v’shalom tragedy strikes. My father a’h was more than responsible in that regard, and his generous life insurance policy provided my mother ylc’t with the financial wherewithal to raise us with menuchas hanefesh and dignity throughout our formative years.

    I would also like to thank you for your openness in permitting me to pose these questions to you. I trust that we can do this in a respectful and constructive manner.

    Here are my questions/suggestions:

    To begin with, both in your advertisements for the program and on your website there is virtually no information about the dedicated individuals who run the program. In a project like yours that relies so much on trust, it is critical that the public have this information. For example; who was the founder of this program, who manages the day-to-day operations, and who are the Board of Directors? Who are the rabbonim who will be overseeing the funds, who will be investing the money, and will the person making the investments and those running the program take a fee and/or commission for his/her efforts? I was a trustee and treasurer of a “yesomim” fund a generation ago and Reb Moshe Feinstein zt’l was our posek whenever we had questions (and there were many, many questions – with just one fund for one family), and Reb Dovid Feinstein ylc’t took over that role after Reb Moshe’s passing. Who is your posek? And what is the succession plan for your posek? For that matter, what is the succession plan for the leadership of Areivim; an important component for programs being set up that will operate for decades.

    I found two Areivim websites http://www.areivim.info/ and http://www.kolyisraelareivim.org. Are they the same organization? They seem like two different organizations. Please clarify that.

    Does Areivim have any mechanism for grievances – where does one go if he/she feels mistreated? Your website notes that Areivim is a “Project of the Va’ad HaRabbonim.” How involved are Va’ad members in the Areivim program and who are the rabbonim? I also saw that Kupat Ha’ir is a sponsor of Areivim. Is Kupat Ha’ir the same as Va’ad Harabbonim? Are they different Rabbonim than those on the Va’ad HaRabbonim? They seem to use the same advertizing format. Are they two organizations or one? Kindly clarify that as well.

    Regarding the actual coverage of the insurance; do you consider Areivim’s benefits to be “guaranteed” or not? Is the Areivim program intended to replace or supplement commercial life insurance programs? In other words, do you recommend that people take life insurance policies in addition to Areivim or not? My reading of the rules indicates that if one’s children are covered by life insurance, there are no Areivim benefits paid. How does this work, and why are we punishing people for being responsible?

    I found the financial model, which does not allow for much in the way of wiggle room, to be very unsettling to say the least, and I have no confidence whatsoever that you will be able to meet your obligations, despite your best intentions. A simple run of the numbers raises concerns. If there are 16,000 subscribers, the maximum amount of money you can raise in one year is approximately $5.4 million ($28 x 12 x 16,000 = $5,376,000). If you divide that by $100,000 (the benefit to each yosom or almanah) that means 54 beneficiaries per year. If you assume five beneficiaries per family (a relatively conservative estimate be’h in our population), that means that the program could only support ten deaths (c”v) per year. Is that a sound estimate? What happens if more than ten men (c”v) pass away in one year, if the average number of children is much higher than five, or if you are unable to collect the $28 per month from each of the members?

    What happens if not enough people (16,000) are subscribed (how are people covered if there is less income)? Who is processing all the credit card transactions, and what happens when people cancel their credit cards, or can’t make payments because they lost their jobs? (I suggest that you ask the executive director of any yeshiva what percentage of tuition goes uncollected each year; and that is with a service being provided directly to their family.) Where in the budget is there money for all the ads and marketing? And if that is coming from your collections, there will be a huge hole when you need to make payments.

    Each child is to get a $100,000 fund set up for the wedding expenses and until then checks are cut for interest or income from that fund. Well; if the money is invested in “safe” vehicles such as CD’s or treasury notes, we are looking at 2-5% a year – at best a few hundred dollars a month; which is basically milk money. And anything with a higher return involves risk. Is Areivim comfortable in investing where there are higher returns with more risk?

    There is no mention of any professionals in your publicity. I consider myself to be moderately knowledgeable about life insurance – for a layman. But I wouldn’t dream of designing or overseeing a project like this because I am way out of my league. Have you consulted with a team of actuaries to crunch the numbers, a legal team to wade through the many legal issues (and there are many of them), accountants to determine the tax deductibility of donations (your contributors are getting a benefit after all) and how the payments will be made in a legal manner; the list goes on and on? And if these are questions raised by an am ha’aretz like myself, just imagine how many dozens of question would arise should you assemble the professionals noted above.

    Then there is the whole issue of health and preconditions. Professional life insurance companies require medical exams. You ask for a written note than the members are in good health. Who determines that, in the event of a payout? Could you just imagine what a mess there will be when conflicts arise in this area? And the fuzziness of your criteria is a sure-fire recipe for confusion and conflict.

    Finally, on a very personal level, as one who lost my father before my 4th birthday, I find the emotional ramifications of Areivim horrifying to say the least and it was this angle which motivated me to write these lines in the first place.

    My mother once remarked to me that in addition to all the other components of the tragedy of my father’s passing, she felt that with his death she lost her privacy, as well intentioned people all around her felt free to comment on her personal life. Well; can you imagine how things would be if our family would have been supported by 16,000 credit card swipes? How would she have felt having to wait for someone in an office to cut her an interest check each month, and for a Rav to approve that each of her three children were destitute enough to warrant a $100,000 fund in his/her name? I was a very wild kid growing up and you know how cruel kids can be sometimes. Can you imagine being taunted in the playground about these financial matters after a fistfight?

    Reb Yoel; to sum up, I got a headache writing these lines just thinking about all the complications of this program and the challenges that could arise. I cannot in good conscience recommend this program, and in the strongest terms recommend that parents take commercial life insurance. $28 per month should buy north of $500,000 of term life insurance that has security, privacy, and avoids all the complications noted above.

    In many ways, your noble efforts remind me of what similarly well-meaning people did years ago with allegations of child abuse – turning their backs on a one-step solution that would have taken advantage of the “systems” in the general population (call the police) and instead created complicated mechanisms instead (a va’ad to oversee abusers) comprised of people with no training in the field. And you know how that one turned out.

    I humbly suggest that you throw your efforts into assisting families in their efforts to purchase commercial life insurance along the lines of a very successful campaign currently run in BMG of Lakewood. It is my sense that balei batim will be glad to assist with this endeavor.

    As we discussed, I am submitting this list of questions and concerns to you directly and privately in order to allow you time to formulate responses to them. Once I receive your response, I will post my questions and your responses simultaneously on my website and invite my readers to open a dialogue with you in a respectful and productive manner.

    I give you my word that I will keep an open mind despite my concerns, and will weigh your responses carefully before I write a full essay on this subject which I plan on publishing in the near future.

    It is my sincere hope that Areivim will emerge from this process stronger and better positioned to serve the needs of our community.

    B’yedidus,

    Yakov

    MR. YOEL BOCHNER’S RESPONSE

    Dear Rabbi Horowitz,

    We are grateful for your interest and the insightful points you raise, and appreciate the opportunity to respond and dispel some of the misconceptions and confusion surrounding our work.

    Your reputation as someone who works tirelessly for progress and change in our community, refusing to accept ‘because that’s the way it always done’ as a reason for stagnation, makes us confident that, if you take the time to study our plan, you will share our vision.

    In addition, your touching personal note about your own childhood underscores the importance of what we’re doing: sparing other humiliation and inconvenience

    It would be cynical and unfair to assume that KYA is ‘just another’ activist organization when, in a sense, we have entirely rewritten the way things are done.

    Not content with mere figurehead rabbinic figures, the rabbanim affiliated with us are involved, investing time, energy and heart in this project, one which has become a priority to them.

    The rabbanim in question are representative of all the various streams within yahadus hacharedis, chassidim, litvishe, Sephardim and Ashkenazim.

    Please note that the rabbanim to not ‘endorse’ us, or promise to daven for people who help us- they are us! Every single rov is already a part of- or will be a part of- our work and they are the prime catalysts for our success.

    In America, the names of Rav Mechel Steinmetz and Rav Benzion Strasser on signed on to the account, and we have hundreds of other rabbanim in communities across America.

    You see, Rabbi Horowitz, the rabbanim are our greatest allies because they know better than anyone else just how broken the old system was, and how workable this one is.

    They are the ones that were faced with the bitter daily task of hearing the tales of pain from new almanos, the accounts of orphans in a home bereft of a breadwinner.

    There was a time before people grew numb, when it was still possible to appeal to the masses and hope to touch their hearts; unfortunately, as tragedy followed tragedy, people- even in a nation of rachmanim- grew a little less sensitive to the relentless onslaught of tzaros.

    The ‘keren’ system, in which the rabbanim formed special accounts for each needy family, was no longer an effective way to galvanize the people and raise the necessary amounts of money.

    Rabbi Horowitz, you- correctly- mention the humiliation of the young orphans that are fully aware of their new status as ‘wards of state’.

    Imagine the shame of young children who are forced to ‘pose’ for the pictures that will be emblazoned on the walls and shuls of their hometown? Is there anywhere to run from such pain?

    We came into being due to original and creative thinking by the rabbanim and askanim involved in these wrenching situations. You, Rabbi Horowitz, raise valid points about how it ought to have been done, in an ideal world, but these dedicated individuals are working within the parameters of reality, well aware of the limitations of people.

    You know the numbers- each head of family commits themselves to three dollars per orphan, in the sad scenario of a parent’s death.

    Three dollars per member – based on a group of 16,500 people in the group- per yassom equals fifty thousand dollars per child.

    A lot of rules and regulations were put in place to assure that the system can work out.

    The idea gathered steam, and in America- where, unfortunately, tragedy is no stranger- askanim wanted a similar program. The ‘keren’ system stopped working here as well, and the embarrassing newspaper campaigns, even those that attempt to maintain the anonymity of the recipient, often cause great collateral damage.

    The lay leaders that created the American model felt that fifty thousand dollars per child was insufficient for this country, and changed the numbers- six dollars per child would equal one hundred thousand dollars per child. We were welcomed by the heads of virtually every single communal organization- Agudas Yisroel, Young Israel, Orthodox Union, Chabad and various other communities.

    The terms and condition were drafted by a team of accountants and actuaries, working pro bono for a cause that was placed at the forefront of the communal agenda by rabbanim.

    Rabbi Horowitz, before we delineate the details, allow us to respond to your overriding concern; why not get people to purchase conventional life insurance?

    The question is a good one. Kol Yisroel Areivim is not an insurance policy and we encourage every person who can purchase a standard policy to do so. The more they invest, the more their families stand to receive in the event of tragedy, c’v.

    Now, for the numbers. In order for a life insurance policy to really make a difference, it would need to provide a minimum $250,000.00 per child. This is based upon the need for $15,000.00 per year per child.

    The maximum return on money, with no risk, is 2.5 per year, which means that the profit on $250,000.00 is $6,250.00 per year. The remainder of the money per child would need to come off the ‘keren’ for each of the ten years, and thus the 2.5 percent yield will decrease proportionately as well.

    This option is an expensive one, and a great many frum families cannot afford the monthly payments in a budget weighed down by mortgage, food, tuition and car payments. Bear in mind that this type of policy is only for ten years and one would need to purchase it at a young age in order to get such a favorable rate.

    As the age of a breadwinner increases, and health concerns arise, the price rises as well, and often those who need it most cannot afford it. In addition, so often the payout of several hundred thousand dollars is not nearly enough and then the families must resort to the benevolence of the community regardless.

    As mentioned, Kol Yisroel Areivim fills a void not in theory- where everyone should have life insurance- but in practice, where many people do not. In fact, even if the deceased did have life insurance, but with a plan that gives less than one hundred thousand dollars per child, Kol Yisroel Areivim fills the gap.

    The rabbanim and lay leaders at our head have drafted regulations that ensure that no individual has excessive power and to maintain accountability and fairness.

    • The KYA Policy is open to all members of Klal Yisroel.

    • All policies will be reviewed by a board of rabbanim and policy acceptance is contingent upon their approval.

    • The rov of the shul where the deceased was a member, of a rov closely associated with the family, will oversee the transfer of funds and ensure that the needs of each individual child are met.

    • The account is opened in the name of the surviving parents and the family rov, as well as a family guardian to ensure that the money is used or invested wisely.

    • Kol Yisroel Areivim reserves the right to have applicants fill out a medical questionnaire that will determine eligibility. In the event that the questionnaire was filled out incorrectly, KYA reserves the right to terminate the agreement. Funds that were paid out must be refunded.

    • Any issues that arise will be dealt with by the rabbinical board of KYA or its authorized arbitrator. Their decisions will be final.

    • In the event of a member’s passing, the agreed-upon fees will be collected from the group’s members. The funds will then be used to establish a trust for the children of the deceased. In the event that the group is complete ,with 16,500 members, the amount will be one hundred thousand dollars per child. If the group is incomplete, there will be a minimum payment of fifty thousand dollars per child

    • The amount collected is $6.00 per orphan, with a maximum total of $288.00 per year.

    • If the charge does not go through for a period of ninety days, membership will be terminated.

    • The money should ideally be allocated for major expenses, such as tuition or marriage, but the rov assigned to the family will be the ultimate arbiter.

    • Since this fund is meant as an opportunity give tzedaka, in a respectful fashion, to almanos and yesomim, no fund will be established for people that have life insurance in place, or a sufficient sum in cash/assets to render them ineligible of receiving communal assistance.

    • Within the organization there is no single individual that has excessive control over the money.

    • The office is run by five askanim that do the office and technical work,and each individual case is assigned one overseer from the central office. These people are efficient and knowledgeable and available to discuss any case or answer questions.

    Obviously, there are others that wish to copy the success of our model, and it would serve the best interests of the klal if we could unite and join forces. For various reasons, this is not the case, however.

    Our appeals are never based upon the drama of painting heartbreaking scenarios and thus using fear and guilt to convince the people. We much prefer to share the facts in an intelligent, clear fashion and respect the ability of people to make intelligent decisions.

    Rabbi Horowitz, we are most grateful for your interest and for taking the time to study our plan and its benefits. Your willingness to ask hard questions is testimony to your concern for Klal Yisroel, and thus, it makes you a most fitting partner for our work. It is gratifying that there are people such as yourself that are realistic enough to recognize the potential problems, yet still hopeful enough to encourage positive change.

    Respectfully,

    Yoel Bochner


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    133 Comments
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    Use Your Head
    Use Your Head
    13 years ago

    As usual Rabbi Horowitz is on the mark. Life insurance already exists with a mature and well-established industry. Small-scale attempts to reinvent this complex wheel may be paved with great intentions, but face a formidable challenge.

    Anonymous
    Anonymous
    13 years ago

    I’ve read the literature in some detail. The numbers don’t work. I really would love to see the actuarial analysis this organization has performed so they can demonstrate that this is not a ponzi scheme. The math in this letter doesn’t really work.

    Anonymous
    Anonymous
    13 years ago

    This is such a blatant scam, I cannot believe anyone take it seriously. Even a small term life insurance policy would be more sensible for the target audience than this “shell game” with the rules determined by some rabbinical cronies of the organizer. I would hope this never gets off the ground or if it does, it will make Dwek look like a tzadik.

    Anonymous
    Anonymous
    13 years ago

    Mark my words – in 4/5 years, this program would go bankrupt siting too many claims, and the “five askanim” will be the only benefactors.

    Sorry for sounding pessimistic, but most of R. Horowitz’s great questions were not answered, and rather diverted in a roundabout way. A for Effort, but I’m not fooled.

    Get term life insurance – and better yet, start a group policy, where the premiums will be even cheaper.

    egghead
    egghead
    13 years ago

    As usual rabbi horowitz you articulated beautifuly all the doubts I had about this program, however reb bochner on the other hand just rambles on and on without answering most of the questions satisfactory

    Anonymous
    Anonymous
    13 years ago

    I appreciate the questions and answers but still see no names and am still left with questions.

    Anonymous
    Anonymous
    13 years ago

    Areivim and kol yisroel are to different organisations Areivim is under Kupat hair And Kolyl yisroel is under Vaad harabbonim.

    Actuary
    Actuary
    13 years ago

    A major problem not discussed above is the makeup of the group of 16K members. The system of collecting just enough premium to pay out any necessary death benefit requires that there will be a constant stream of new members to take over the premium-paying roles of the deceased members. These plans were actually common in the 1800s (some were precursors to today’s life insurance companies) and this was a major issue- the early deaths were paid out properly but as the years progressed, there would be a steadily decreasing premium stream as more and more members died out.I applaud the intention of this program but like Rabbi Horowitz, I do not think it is viable.

    rescue
    rescue
    13 years ago

    I don’t want to say this is a scam, but if it sounds like a duck, walks like a duck and quacks like a duck………………. Bochner did not respond to almost all the specific questions posed and sounds like a politician answering questions.

    Anonymous
    Anonymous
    13 years ago

    So there are two competing orgenizations! How sad

    Yitz
    Yitz
    13 years ago

    How does Areivim work?

    Anonymous
    Anonymous
    13 years ago

    wow. 30 hours before kabbolas hatorah (in nyc) and the cynicism is out. I’m sure all of you are doing more for Klal Yisrael by sitting on the internet all day instead of trying to help almonos and yesomim. Life insurance costs hundreds per year assuming you are totally healthy and only goes up in price. Areivim costs nothing unless someone dies r”l and you get the added benefit of giving tzedaka. Most people will not get this instead of life insurance, they wouldn’t have gotten anything (right or wrong). Just chill out everyone and let some people do a chessed!!! (may we never need them)

    Anonymous
    Anonymous
    13 years ago

    Im A member of Areivim and i think that its a great program its A achedus its בדרך כבוד its doesn’t cost anything only if any strikes in the group I think that every one should sing up 1866 727 3484

    Anonymous
    Anonymous
    13 years ago

    Powerful thought out questions. Very meek answers that simply don’t address each issue.

    Right
    Right
    13 years ago

    Very interesting article, it raises many questions I always had and I believe that everyone shoudl buy a life insurance (A term life insurance is not more expensive.)

    Such an orgenization has much more overheads that will need to be covered, from where? even an efficient orgenization runs approximatelly with a 25% Budget allocated for fundraizing and overhead.

    I don’t mean to criticize the intentions of the organization, but I would clearly state to everyone. Don’t rely on it! buy yourself a life insurance.

    shmiel glassman
    shmiel glassman
    13 years ago

    proud member since the beginning (& 2 life ins. polocies) for one reason its a reasonable way to give tzedaka & the ” arvus” is important on a spiritual level – good questions yes- many of them with a bit of cynisism – a little “real” respect & not lip service /hope not to need it – reb yankel writing the letter is fine but this letter being posted is a publicity stunt attacking an org. – if this letter was sincere reb yankel couldve mailed it to the rabbonim that signed on & aske them to look into it ” tzorech iyun gadol”

    The Truth
    The Truth
    13 years ago

    These alternative life insurance programs are great – if no one ever dies but over time, when they have to pay out more and more, it can not be a viable program.

    In my opinion, the root of the problem, is that people in our chareidi communities are living way beyond their means – both because of lifestyle (tuition, mortgage, luxuries etc) & because of minimal income (Kollel, non-professional jobs, low-paying jobs, etc). Combine that with people generally not planning for the future, with little or no savings or retirement accounts and we have left ourselves in a situation living balanced on a tight-rope, hoping nothing will go wrong. These great moisdos are trying to provide a safety net to those who unfortunately will fall. I hope they can catch everyone but I fear that as another cog in the system, they will be overwhelmed & demand for help will outstrip supply.

    It seems that its just another moisad trying -very impressively- using great marketing trying to get people to give to THEIR tzedoko organization. Yes the facts on the ground arn’t meet the ideal situation and we have to be practical & deal with it the way it is but another band aid is never a long term solution.

    yudel shain
    yudel shain
    13 years ago

    Rabbi Horowitz’s on target questions were on target. The response was not convincing but rather confusing. Perhaps Rabbi Horowitz & the KYA heads & Rabonim can sit down together & see if it works (for the benefit of all). If it does work but it just wasn’t explained right, let’s not shoot darts.

    Anonymous
    Anonymous
    13 years ago

    The economic and actuarial model underlying this scheme is doomed to failure as there will be years in the short term that there will be insufficient funds available to pay out to an unusually high claims rate and over the long term, the cash flow in will not sustain payouts. It is also lacking in transparency and accountability since there is no oversight of the plan administration. Why can’t yiddin avoid creating these black holes that are like “lifnei evair lo tetain michshol”.

    5T Grocery Store
    5T Grocery Store
    13 years ago

    sales of the product are essential. we must proptect the pioples. my father died without life insurance..can you believe it…no life insurance… i had my mother get a job because things would have been very bad

    ACTUARY
    ACTUARY
    13 years ago

    Common sense rules the day. The numbers don’t work, and every actuary that has been asked about it has said that it doesn’t work. (There was an actuarial analysis on the orthonomics blog.) PLEASE just buy life insurance; sure the ins cos make some money, but they also get a lot more than a 2.5% return – so the buyer is still better off than under this scheme. And most important, upon death the family gets the money as opposed to having to make a case to the rabonim and askonim for each payment.

    Yossi
    Yossi
    13 years ago

    So many questions and NO one has done anything only this group…Why dont we ask how many almunes and yesoymim have been saved by this program.? No one is asking from anyone his life savings..This can not be a ponzi scheme if they keep out paying out….I know of a almuneh who has been saved by this program and klal yisroel did not have to pick up the tab….I just wish Rabbi Horowitz should please ask every jewish home owner to make the minimum home owners policy in case chas veshulem a fire destroys their home and then need to make appeals in shul to refurnish them….Maybe we need areivim for fire disasters too….eep the great work up

    Anonymous
    Anonymous
    13 years ago

    It is not a scam and it is not a substitute for life insurance. It is a means of providing tzedakah for the families of those who do not have sufficient life insurance, without making a separate collection and mailing for that family.

    No one should view it as a substitute for life insurance. View it as Tzedakah for Yesomim and Almonos. Obviously each person needs to decide for themselves where to give their Tzedakah to.

    Anonymous
    Anonymous
    13 years ago

    More questions than answers remain.

    Worst of all, all signatories waive their right to sue the organization in a court of law. Is this for real???

    Anonymous
    Anonymous
    13 years ago

    Here is what I am wondering, if this is such a great program has it been re-insured?

    If they are able to demonstrate that the program has been re-insured by a multinational re-insurer that means a real insurance company has validated their assumptions.

    areivim member
    areivim member
    13 years ago

    ok so what they dont tell you is that the spouse doesnt get a payout if there is less than 4 children. so if theres a family of 3 only the kids get 100k each. also they do not make payments to any child of the deceased if said child is over the age of 28 yrs old. this program is not a replacement for life insurance by any means, but if you are like me and cannot afford the monthly premiums of life insurance and have young children in the house it’s a good idea.

    Anonymous
    Anonymous
    13 years ago

    Rabbi is Horowitz is 100% Right, this orgnazation should be abolished, it may be illegal to solict in the US, it encourages young people not to buy Life Insurance and there is No Guarantee that they will be around in 15-20 years from now, almost all young people could afford plenty of Term Insurance

    Caution
    Caution
    13 years ago

    Rabbi H is right on target with his questions and hestitations. The answers supplied are vague and my gut tells me this is a very atypical deal that should be avoided.

    Anonymous
    Anonymous
    13 years ago

    WHAT IS EVERYONE’S ISSUE – this is a Tzedaka – not life insurance!! It only applies to specific situations – it’s not a ponzi scheme. If you have issues – DEAL WITH IT PRIVATELY! why in the world is this public?

    The Truth
    The Truth
    13 years ago

    “• The rov of the shul where the deceased was a member, of a rov closely associated with the family, will oversee the transfer of funds and ensure that the needs of each individual child are met. “

    – Who are these Rabbonim? Do they know that they have this huge responsibility or are they assumed to take responsibility?

    “• The office is run by five askanim that do the office and technical work, and each individual case is assigned one overseer from the central office. These people are efficient and knowledgeable and available to discuss any case or answer questions.”

    – Who are the 5 Askanim in ‘The Office’? What is ‘the central office’ and who runs it? Why the need for 2 offices?

    “• The KYA Policy is open to all members of Klal Yisroel.

    • Since this fund is meant as an opportunity give tzedaka, in a respectful fashion, to almanos and yesomim, no fund will be established for people that have life insurance in place, or a sufficient sum in cash/assets to render them ineligible of receiving communal assistance. “

    – So its open to everyone, unless you have a real life insurance policy or we unnamed ” rabbanim and lay leaders at our head”, decide you are not eligible.

    Hmmm.

    No Doubt
    No Doubt
    13 years ago

    If this organization is connected in any way to Kupat Ha’ir or Va’ad HaRabbonim, no further investigation is required: It’s 100% crooked.

    KYA
    KYA
    13 years ago

    can some 1 write a question what was not answered with in the lines of R’ Yoel Bochner?

    Anonymous
    Anonymous
    13 years ago

    I do not know their model, but per SS the chance of dying at age 30 is 0.1454%. Assuming (everyone on this program is 30) this based on a population of 16,500 the average deaths a year would be 24. If on average there are 3 dependent’s the yearly payout would be about $7,200,000. Based on the current contribution of $28 per month that covers $5,544,000. So this is a bit short.

    Now there are several things I wonder about. Even if you want to think the life expectancy in the jewish community is higher than the national average so that the benefits should not be a problem to pay out given the figures I just described, I would imaging that the average age of the policyholder’s would be higher. If their are policyholders in their 40’s the rates really start shooting up. Secondly I suggested an average of 3 dependents, I would imaging the average dependents are higher. (if you increase the average risk of death to 0.02021% and average dependents to 5, the payout is $16,700,000 with collected funds of only $5,544,000).

    It seems to me without full transparency I would have to seriously wonder whether this policy is feasible.

    Kollel Guy
    Kollel Guy
    13 years ago

    this is like the same program running in eretz yisroel and is working good. dont know why so many people here are dissing.

    Another Actuary
    Another Actuary
    13 years ago

    I work for a large life insurance company and even though we have hundreds of billions in reserves and assets under our control, we still spread our risk amongst other insurance companies through re-insurance.

    Additionally, we have a huge underwriting department. A non-smoker with a perfect driving record and computer programming job should not pay the same premium as a smoker who washes the windows on skyscrapers and has his drivers license suspended 3 times in the past 10 years.

    Every single policy holder is assigned a set of mortality tables based on smoker/ non-smoker and male/ female. Every single policy holder is further evaluated and given a factor that their table is multiplied by (starting from 1) that is dependant on prior history.

    I am in no position to disagree with any of the people mentioned above but I think a better method would be for people to help fund the premiums going towards policies at established life insurance companies for those who may be short of cash when the premiums are due. (Maybe once a year, not on a monthly basis.)

    insider
    insider
    13 years ago

    No one is saying that Areivim is a scam. What is being said is that having life insurance is infinitely better. For $15 a month, a 30 year old man can have $500,000 insurance. That $15 is less than paying for two orphans (who will only get $200,000 together if they meet all of the conditions. For $15, you own almana (chas veshalom) and your own orpans (chas veshalom) will get $500,000, no questions asked and no conditions attached. There is no comparison – no contest. The insurance comapnies are regulated by law. Who regulates Areivim?????

    anonymous
    anonymous
    13 years ago

    Kudos to Rabbi Horowitz for addressing this head on. I received a flyer about this in the mail and read it through…..it sounded like a scam and I was disappointed that this is going around the Jewish community – that my fellow Jews would lower themselves to the level of the goyim scamming the vulnerable…….There was not one mention of any Rabbi or anyones name……If its trustworthy why isn’t there more transparency. This man did not answer anything…….He mentioned two Rabbis and nothing specific about them…..I wonder if they know that their names are being used for this purpose….

    pupa yid
    pupa yid
    13 years ago

    Some points people miss is that the fund collects the money when the person dies and gives it to the kid when ut gets married who sits on the money till then?

    Now I heard that if the family had life insurance they don’t get the money from arevim so the question is who gets the money collected?

    Erliche Yid
    Erliche Yid
    13 years ago

    This is an absolute chutzpah from the
    so called Rabbi Horowitz to smash an organization like Arivim with no prove and people left and right will cancel their membership, who will suffer only the orphans, this is Rishus without borders Shame on You Rabbi Horowitz

    term owner
    term owner
    13 years ago

    This areivim is a very good idea (dream) , and this orginization is just dreing a cup, my goal is to protect my familys future , without other pepole controling my family , for me term is peace of mind , its with the best life insurance company , its backed by ny state insurance dep. i belive if i love my wife and kids i should have term ins. for me with 2 kids arievim would not be any help, IF THERE IS PEPOLE NOT GETTING TERM BECAUSE THERE IS AREIVIM , MY OPINION IS THAT AREIVIM SHOULD BE CLOSED DOWN , the outcome of this this company will bring lots of tzures to kllal yisruel , everyone has their rights to choose their own way of protecting their family,

    Anonymous
    Anonymous
    13 years ago

    I’m a member they only take money after rm”l sombody passed away so you give $6.00 for a usim so what’s the big deal and if you b”h have money or life insurance you gave tzdoka thank hasam that you could give unfortnly some people can’t afford life insurance for varies reasons so they are members at arivim and they’ll live gezinterheit up to 120 and marry of there children with nacas and if rm”l you have to give so be it

    I
    I
    13 years ago

    READ THE TERMS AND CONDITIONS ON THE WEBSITE. IT IS FILLED WITH PROBLEMS. HERE ARE QUOTES BELOW

    While they advertise it is open to “all of klal yisroel” it is only open to “Kollel men who learn Torah as their sole occupation, and men who work for a living while maintaining a torah observant home. They and/or their wives are eligible. This includes widows and divorcees who are Torah-observant.” Why bother calling it Kol Yisroel?

    “in the event that the number of the group’s members increases, and the agreement with the bank remains in effect, the sum charged to the group’s members will be decreased proportionally” THIS IS FALSE assuming the same percent of people always die your fee will remain the same.

    “The program is designated only for orphans who are Torah-observant!” My son doesnt learn in Lake Wood, is he Torah Observant???

    “Since it involves tzedaka money designated for the needy only, it is agreed that if an orphan has the financial capability to pay for living and wedding expenses (such as through inheritance and/or life insurance etc.), no fund will be established for him. (Or a partial fund will be established for him, to complete the sum of $50,000 – $100,000″…..

    I
    I
    13 years ago

    Continuation
    …”Since it involves tzedaka money designated for the needy only, it is agreed that if an orphan has the financial capability to pay for living and wedding expenses (such as through inheritance and/or life insurance etc.), no fund will be established for him. (Or a partial fund will be established for him, to complete the sum of $50,000 – $100,000, as explained in II).)” But you say above I could get insurance in addition to this program, now you are saying my child isnt eligible if I had insurance??

    There are major issues with this program. I feel for those 14,000 (that they claim) that have signed up and are flushing away their moneys.

    anonymous
    anonymous
    13 years ago

    Its a wonderful initiative of the program to put such efforts into securing financial security for the widowed and yisomim. However, Rabbi Horowitz raises some very valid and true concerns which opens the floor for improvement and better opportunities for the program. I am not an expert on the questions nor the answers and therefore do not seek to comment or judge either of them. It is rather the public that posts comments on this and other forums/sites that compels me to write this comment.
    Though, there is always room for opinions, questions, concerns, comments or just simple open discussions for all the various topics discussed on this and other websites I always am taken aback at the disrespect shown in these comments. It is so shameful and disheartening to read the loath and disrespect for others, let alone for our rabbonim! Rabbi Horowitz’s letter is the perfect example that teaches us so beautifully that we can agree to disagree RESPECTFULLY! Let us pick up on Rabbi Horowitz’s positive style and keep posting respectfully! It will make the world a better place and these forums a definite more pleasant and enriching experience.

    Proper Actuarial Analysis and Investment
    Proper Actuarial Analysis and Investment
    13 years ago

    The program is needed, because families that have no income have no insurable value, and likely can’t get insurance from a company with a strong AM Best Rating, and with the best terms. That being said, Mr. Bochner, has not addressed the most difficult questions, how will the company be managed, even though it is a non-profit, to some extent it still needs to be managed like a for profit endeavor, if we are to making the endowment and premiums achieve maximum viability; once we have reached critical mass of 16,500 souls.

    after the actuarial analysis let me make a suggestion related to the “growth” area of fund allocation and investment. The Wall Street Journal had an article recently about “death bonds.” They should consider an investment in this asset class. It is a corporate fixed income bond with a higher coupon, because they don’t have the “best,” credit ratings, but they have an early redemption upon death with a beneficiary. If the bondholder dies early they can claim full maturity at time of death increasing the total IRR. If they don’t die then there was still a substantial interest rate of better than 2.5%.

    Dave
    Dave
    13 years ago

    At best, this is a well intentioned bad idea.

    Anonymous
    Anonymous
    13 years ago

    While I too feel that many of rabbi horowtz’s questions were not answered, and that the math is on shaky grounds, I don’t see why are some readers making such a big deal: the way I look at it, this is basically a tzedakah fund for widows and orphans. For a few dollars a month you can help out a greaving family. So whAt if it will bankrupt in 10 years? So what if your own kids are illegible? This isnot an investment. It’s taking all the various full page ads you already see in hamodia and yated every week, and letters you already recieve from various rabbeim in your kehillah setting up funds, and combining them in a more efficient, streamlined organization.
    How bad can it be?
    How much can you already loose?

    Joe Shmoe
    Joe Shmoe
    13 years ago

    I dont know who this rabbi horowitz is! For me, and a real majority of people, we dont have any extra money to line the pockets of the insurance brokers! (Horrible way to attack, Mr. Horowitz) I do take your attack on an organization which does not look after your wrong sense of direction personally! Please post exactly how much money you make a year and how many kids you have to pay tuition for, food etc. it’s just not possible for most people to make that kind of money.

    Now Let me answer your questions.

    1) which rabbonim are on top of it? going to the media is the wrong way to find out. the right way would be to inquire when purchasing this insurance (if you will). You really think that if I would be one of the rabbonim I’d be interested in fighting with people like you? I’d prefer to remain anonymous. (I’m not even talking of the well lined insurance brokers pockets support and money any rov backing this competition will lose)

    2)We did have a way that DID WORK! People used to give much more tzedaka years ago BUT STOPPED When money hungry insurance companies jumped up to convince you to give them your money!
    3) What about health insurance? other liability coverages?

    joe shmoe
    joe shmoe
    13 years ago

    I dont go for life insurance, 1) I dont have the money for it. 2) I dont go for the “you can lock in such a good price” (when I pass a mercedes leasing co. I dont just purchase a car cause “I can lock in a good price”) 3) I dont have a good health insurance policy yet, am I really trying to ensure that if I get too sick I should die in peace rather then have a chance to get well? (just cause the real money lining insurance salesmen (thats exactly what they are, not financial planners, not brokers! SALESMEN! they will kill you for calling them this name) 4) I’m far from ensuring my life, (tuition, marriage, food etc.) will not have to shnur, should I rather worry about my after death? 4) Bigot! this is the place to ask these questions! If I would be the rebbe, I’d assur putting my name on the internet! lest bums like you will be on my back! your publishing on the internet proves your horrible intent.

    Last but not least,
    5) this is a real tzedaka and people will step up to donate for this worthy org.

    yankel
    yankel
    13 years ago

    i have 4 million insurance on myself and 3mm on my wife, i earn 200k and have 7 kids, i signed up for one of these org. as a tzadakeh, i paid $28. a few month ago and now i got a text to pay another $ 56.00, after finding out about the other org, i am thinking of joining the other org. as well. issues that i have with these org. after being discussed, y does a medical condition person not get the benefits, they should be the first one getting as they cant get insurance from a life ins. co., wouldn’t that be real tzadokeh. and even a irresponsible person not getting insurance, why should his kids suffer, is it charity or its insurance. 2. with each brochure there should be a flyer talking about real term life insurance pricing and explaining how important and affordable it is, sounds to me that the people running it really don’t care about people buying life insurance… plus all the points that rabbi h. talks about r gr8 points , death benefit tax, supervision, family privacy,( although i have a fam. member that lost her house after a divorce to a good investment on a cousins partnership….)etc, to b continued..