Areivim USA - Coronavirus

[S209]

I’ve been following the poll and it seems that approximately 30% of members who answered only have Areivim, no LI. If those people drop out because premiums are raised, the organization is in very hot water.

[JACKBLUE]

You’re burning the candles on both ends now.

On the one hand you say Arevim is a supplement to LI and informed Arevim should have LI, OTOH you say at least they’ll have Arevim.

i’m sorry if I wasn’t clear enough.
1. Make LI, also make Areivim for Tzedaka, (BTW you’ll also get a nice payout if Chas V’Shulam....
2. If you don’t plan on making LI for some reason (which I see unfortunately is a normal thing) at least make Areivim.

[JACKBLUE]

I’ve been following the poll and it seems that approximately 30% of members who answered only have Areivim, no LI. If those people drop out because premiums are raised, the organization is in very hot water.

Premiums aren’t going up. They won’t charge a penny more then $28 max a month.
Obviously some people are willing to pay now $400 to be able to collect the money faster.

[Lurker]

Exactly it CAN, but unfortunately we’re seeing so many without LI so at least have Areivim.

So here's a question, and maybe @aygart  has some insight on this. Between the money paid into Areivim and the millions collected on a regular basis at parlor meetings, why doesn't someone pool this money and use it to buy term life insurance for everyone? It could still be considered tzedaka since you're subsidizing other people's policies, and would probably be more cost-effective in terms of returned value. It wouldn't completely replace individual LI, as people can have additional policies to fit their needs (which doesn't change from the current model). There would also be a huge increase in participation. I know I'd be willing to pay a little more for an additional term plan, especially if I knew this would be helping so many others get LI.

[S209]

So here's a question, and maybe @aygart  has some insight on this. Between the money paid into Areivim and the millions collected on a regular basis at parlor meetings, why doesn't someone pool this money and use it to buy term life insurance for everyone? It could still be considered tzedaka since you're subsidizing other people's policies, and would probably be more cost-effective in terms of returned value. It wouldn't completely replace individual LI, as people can have additional policies to fit their needs (which doesn't change from the current model). There would also be a huge increase in participation. I know I'd be willing to pay a little more for an additional term plan, especially if I knew this would be helping so many others get LI.

Wouldn’t term insurance for everyone be much more expensive? Especially insuring both spouses? Especially considering the amount of uninsurable?

[mgarfin]

So here's a question, and maybe @aygart  has some insight on this. Between the money paid into Areivim and the millions collected on a regular basis at parlor meetings, why doesn't someone pool this money and use it to buy term life insurance for everyone? It could still be considered tzedaka since you're subsidizing other people's policies, and would probably be more cost-effective in terms of returned value. It wouldn't completely replace individual LI, as people can have additional policies to fit their needs (which doesn't change from the current model). There would also be a huge increase in participation. I know I'd be willing to pay a little more for an additional term plan, especially if I knew this would be helping so many others get LI.

No way to make this work

[JACKBLUE]

So here's a question, and maybe @aygart  has some insight on this. Between the money paid into Areivim and the millions collected on a regular basis at parlor meetings, why doesn't someone pool this money and use it to buy term life insurance for everyone? It could still be considered tzedaka since you're subsidizing other people's policies, and would probably be more cost-effective in terms of returned value. It wouldn't completely replace individual LI, as people can have additional policies to fit their needs (which doesn't change from the current model). There would also be a huge increase in participation. I know I'd be willing to pay a little more for an additional term plan, especially if I knew this would be helping so many others get LI.

Fair point, but the odds this should happen is very high.

Beside here are some things Areivim has over LI
1. LI is only for healthy people, Areivim is for also for people with conditions.
2. LI is only for 1 person, Areivim is for both, the husband and wife.
3. For a 45 year old with 10 kids unmarried, he can still get Areivim which would be $1.1M coverage, and LI would cost him way more.

[S209]

Premiums aren’t going up. They won’t charge a penny more then $28 max a month.
Obviously some people are willing to pay now $400 to be able to collect the money faster.

Then how will they stay solvent long term? They don’t have enough leeway to collect this money along with their other collections at this price point for the foreseeable future.

[mgarfin]

One thing I find also very interesting

People tend to buy life insurance only for father not mother.
They underestimate the burden of losing a mother, even if she's not bringing in a income, on a family

[JACKBLUE]

Then how will they stay solvent long term? They don’t have enough leeway to collect this money along with their other collections at this price point for the foreseeable future.

They do it will just take 3 years, which I don’t see as a problem because the money is anyway made to put away for marrying of the child.

[S209]

Fair point, but the odds this should happen is very high.

Beside here are some things Areivim has over LI
1. LI is only for healthy people, Areivim is for also for people with conditions.
2. LI is only for 1 person, Areivim is for both, the husband and wife.
3. For a 45 year old with 10 kids unmarried, he can still get Areivim which would be $1.1M coverage, and LI would cost him way more.

I think this is precisely the point, if all of these facts are true then it’s inevitable that they will eventually go bankrupt.. there’s a reason it’s more expensive when actuaries are deciding price points. Contrary to what you think, the administrative expenses of insurance policies are not the bulk of your payments.

[Lurker]

Wouldn’t term insurance for everyone be much more expensive? Especially insuring both spouses? Especially considering the amount of uninsurable?

It would definitely be more than $28/mo. I think $50-60/mo plus the millions that are raised in the parlor meetings may cover it. Haven't even begun to do the math, it just seems a little more financially viable than the current Areivim model.

[S209]

They do it will just take 3 years, which I don’t see as a problem because the money is anyway made to put away for marrying of the child.

During which time more people will be dying. How will they cover those? The next few years? How do you spell PONZI SCHEME?

You can’t keep kicking the can down the road, and you can’t raise the premiums. Which leads to the uncomfortable fact that the best options are those I listed above (unless you have a better suggestion)- give the families less, fundraise privately, offer members to voluntarily contribute extra, or some combination thereof.

[avromie7]

So here's a question, and maybe @aygart  has some insight on this. Between the money paid into Areivim and the millions collected on a regular basis at parlor meetings, why doesn't someone pool this money and use it to buy term life insurance for everyone? It could still be considered tzedaka since you're subsidizing other people's policies, and would probably be more cost-effective in terms of returned value. It wouldn't completely replace individual LI, as people can have additional policies to fit their needs (which doesn't change from the current model). There would also be a huge increase in participation. I know I'd be willing to pay a little more for an additional term plan, especially if I knew this would be helping so many others get LI.

It would definitely be more than $28/mo. I think $50-60/mo plus the millions that are raised in the parlor meetings may cover it. Haven't even begun to do the math, it just seems a little more financially viable than the current Areivim model.

I don't know the numbers, but I can't imagine you'll get more for your money by buying LI for everyone. Besides for the risk of payout, LI has many more related expenses (overhead, paying agents, etc.)and profit which areivim and campaigns don't have.

[mgarfin]

They do it will just take 3 years, which I don’t see as a problem because the money is anyway made to put away for marrying of the child.

That can't be as there will probably be regular deaths unfortunately throughout the 3 years

Contrary to what you think, the administrative expenses of insurance policies are not the bulk of your payments.

Profit is a big fact in a life insurance company contrary to an organization

I see Areivim similar to a health share.

[AsherO]

i’m sorry if I wasn’t clear enough.
1. Make LI, also make Areivim for Tzedaka, (BTW you’ll also get a nice payout if Chas V’Shulam....

You keep citing Tzedakah as if it’s somehow a counter-argument to my contention that Arevim is unsustainable.

Fair point, but the odds this should happen is very high.

Beside here are some things Areivim has over LI
1. LI is only for healthy people, Areivim is for also for people with conditions.
2. LI is only for 1 person, Areivim is for both, the husband and wife.
3. For a 45 year old with 10 kids unmarried, he can still get Areivim which would be $1.1M coverage, and LI would cost him way more.

Those three are all reasons Arevim is unsustainable. LI costs many multiple times $28/month for the same level of coverage. The life insurance companies are profitable, but they also invest better than Arevim (who seems to raise the funds as-hoc), potentially more efficient on scale, and their profits are a relatively percentage of their revenues/investment profits.

[mgarfin]

You keep citing Tzedakah as if it’s somehow a counter-argument to my contention that Arevim is unsustainable.

Those three are all reasons Arevim is unsustainable. LI costs many multiple times $28/month for the same level of coverage. The life insurance companies are profitable, but they also invest better than Arevim (who seems to raise the funds as-hoc), potentially more efficient on scale, and their profits are a relatively percentage of their revenues/investment profits.

It's tzdakah as it does not differentiate by the payout you may get

It may not be sustainable at $28 but still can be cheaper than LI for many. Similar to health share

[avromie7]

During which time more people will be dying. How will they cover those? The next few years? How do you spell PONZI SCHEME?

You can’t keep kicking the can down the road, and you can’t raise the premiums. Which leads to the uncomfortable fact that the best options are those I listed above (unless you have a better suggestion)- give the families less, fundraise privately, offer members to voluntarily contribute extra, or some combination thereof.

Over the past 3 years, how much did they actually collect from each member? Assuming the rate of collections continues to be the same as it was before coronavirus with coronavirus being the outlier, anything less than $28/month will be able to be used to catch up. For example if instead of collecting $336/year  they collected $280 that means they have an average of $56/year leeway, at that rate in 4 years they will be fully caught up.

[YitzyS]

Fair point, but the odds this should happen is very high.

Beside here are some things Areivim has over LI
1. LI is only for healthy people, Areivim is for also for people with conditions.
2. LI is only for 1 person, Areivim is for both, the husband and wife.
3. For a 45 year old with 10 kids unmarried, he can still get Areivim which would be $1.1M coverage, and LI would cost him way more.

-1.
You have to sign that both the husband and the wife are in complete health. People may unfortunately lie, but I'm sure it dissuades the majority of people with conditions from signing up falsely.

[keepsmiling123]

You keep citing Tzedakah as if it’s somehow a counter-argument to my contention that Arevim is unsustainable.

Those three are all reasons Arevim is unsustainable. LI costs many multiple times $28/month for the same level of coverage.

Depends on health and how early you buy in...also many employers give term life with options to buy supplemental at pretty low rates.