Areivim USA - Coronavirus

[aygart]

I wouldn't make assumptions based on 1 year, we would need to see the past 5-10 years.

I am making zero assumptions, only raising concerns.

[ExGingi]

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

You are simply WRONG. The reason Areivim IS sustainable is that there are no guarantees or promises, just intentions, and that is why citing Tzedakah as a counter-argument to sustainability is valid.

That doesn't mean it might not shut down when people realize that intentions ≠ promises, עאכו"כ not guarantees.

I pointed out the flaws to anyone who asked me about Areivim. I praise them as a well intentioned צדקה, and hopefully in raising awareness to Life Insurance, but point out that it is not insurance, and there are no guarantees.

Here are some changes they might want to implement in order to make it more sustainable:

• Areivim USA is registered as a 501(c)3 Religious Corporation, and as such isn't required to file form 990 with the IRS. It would be beneficial to either file such a form, or at the very least provide an annual report for transparency purposes.
  
  
• Joining Areivim should require proof of an in-force life insurance policy on the member and spouse. Such proof should be provided annually. There should be two exceptions to this requirement: a. Religious exemption (i.e. following a ruling not permitting purchase of Life Insurance - such as Stolin), or b. Uninsurable (or highly rated by insurance companies). In the case of people that don't have their own life insurance, they should be required to pay a monthly amount into a separate fund at Areivim USA. If no "claim" was filed by the time member reaches a certain point, a portion (85-95%) could be returned to the member/family and membership terminated. This monthly amount would be in addition to all other collections.
  
  

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. Addressed above. Areivim should perform some kind of basic underwriting and have a requirement for higher-risk individuals.
2. Huh? Most of my clients have life insurance on both spouses.
3. What was this 45 year old doing for the past 20 years to protect and provide for his family?

[aygart]

That sounds odd that there would be different charges to different members in different months? Anyone else have similar data to share?

Anyone want to share/verify the details provided on beneficiaries were the same? If there are differences there . . . E.g. those in crown heights told the death is Manchester and those in Manchester told the death is in crown heights. . . That would make it pretty obvious something is wrong here.

The explanation can be very simple if they have different billing dates.

[aygart]

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.

Note that every single point you mentioned is a reason why relying on Areivim is foolhardy.

[aygart]

You are simply WRONG. The reason Areivim IS sustainable is that there are no guarantees or promises, just intentions, and that is why citing Tzedakah as a counter-argument to sustainability is valid.

THIS!

[JACKBLUE]

I will look up my CC charges soon and update you. Could be I’m wrong.

2015

Jan $28
Feb $28
March $28
April $28
May $28
June $28
Nov $7

2016

Jan $28
Feb $7
May $28
June $21
Aug $14
Sep $28
Oct $28
Nov $21

2017

Feb $21
Aug $28

2018

April $28
May $21
June 28
July $28
Aug $28
Nov $28
Dec $7

2019

Jan $28
Feb $28
March $28
April $28
June $28
July $28
Aug $28
Sep $28
Nov $28
Dec $28

[ExGingi]

Major difference between this and LI is that in LI you always make payments, even when losses are low. This allows companies to build reserves (which accumulate interest as well) for these tail events. Had Areivim done this (and not invested the money in SUNGAMES) their liquidity/solvency would be in a much better position.

Is this a fact? Did they indeed do this? If so, they should have been shut down as soon as that became public knowledge!

Playing catch up next few years may hopefully work but wouldn't get them an AMBEST A++.

I'm also curious where the line is drawn with regards to not being subject to DOI regulations/oversight.

As I pointed out several times, Areivim is a Religious organization, and their terms provide absolutely no guarantees or promises. It will therefore never be rated by A.M. Best and not be subject to state insurance regulation (unless someone complains and says that Areivim didn't provide the coverage promised, and then if regulators decide that it looks enough like insurance, they might shut it down - but I don't think it's likely).

[ExGingi]

iirc, here in Israel, (most of) the chareidi politicians got the government to heavily subsidize LI for avreichim recently. Perhaps this is s/t that the tzibbur in the US could create as well.

http://lifeinisrael.blogspot.com/2019/06/life-insurance-for-avreichim-finally.html

This seems like a case of gross misunderstanding by the reporters.

What I seem to gather from this is that avreichim who are paid a stipend by the government (indirectly?) will have a small deduction off their monthly stipend (mandatory participation - hence no adverse selection) which will provide some sort of "group term life insurance" - my guess is that such insurance will ensure that the monthly stipend continues even if the avreich passes away, G-d forbid. I doubt there is any government subsidy (beyond the actual stipend that is paid by the government in the first place).

[Toasted]

Is this a fact? Did they indeed do this? If so, they should have been shut down as soon as that became public knowledge!


As I pointed out several times, Areivim is a Religious organization, and their terms provide absolutely no guarantees or promises. It will therefore never be rated by A.M. Best and not be subject to state insurance regulation (unless someone complains and says that Areivim didn't provide the coverage promised, and then if regulators decide that it looks enough like insurance, they might shut it down - but I don't think it's likely).

First point was sarcasm. They don't save anything. Just saying that many who did end up losing their money to some ill will get rich quick scheme (endorsed by some respected people of course). Which actually highlights why insurance regulations are important for consumer protection. Insurance Co needs to invest their capital in safe/liquid vehicles.

Not sure why Religious Organization exempts you from anything. How about a religious drug company, religious car manufacturer? No oversight?

[ExGingi]

Not sure why Religious Organization exempts you from anything. How about a religious drug company, religious car manufacturer? No oversight?

I guess it's part of the separation of church and state. If you can pull off something like https://www.spaghettimonster.org/ then I guess you can operate without filing a 990. Though I doubt you can do that while manufacturing cars for sale to the general public or doing something with controlled substances.

[YitzyS]

Hello people.

Areivim is a charity. Already said it, but I'll say it again. If they would close today, it would have been a resounding success.

Stop scrutinizing it through the lens of business. It's not a business.

Stop using Covid-19 as the microscope sample. There were many businesses with sound business plans that have been decimated by this coronavirus. Areivim worked until now, and they seem to be handling this crisis pretty reasonably.

Yes, it is okay to ask for increased transparency. But to hold them - during these times - to the standard of a typical business or a LI company - during prosperous times? You are needlessly dissuading people from partaking in a bona fide tzedakah.

End Rant.

[aygart]

Hello people.

Areivim is a charity. Already said it, but I'll say it again. If they would close today, it would have been a resounding success.

Stop scrutinizing it through the lens of business. It's not a business.

Stop using Covid-19 as the microscope sample. There were many businesses with sound business plans that have been decimated by this coronavirus. Areivim worked until now, and they seem to be handling this crisis pretty reasonably.

Yes, it is okay to ask for increased transparency. But to hold them - during these times - to the standard of a typical business or a LI company - during prosperous times? You are needlessly dissuading people from partaking in a bona fide tzedakah.

End Rant.

That is great as a fundraising gimick until you hear people saying that they are relying on it instead of LI.

[S209]

Stop using Covid-19 as the microscope sample. There were many businesses with sound business plans that have been decimated by this coronavirus. Areivim worked until now, and they seem to be handling this crisis pretty reasonably.

That has been my point. They should NOT treat these deaths like regular deaths. If they do, they will go under. They need to separate these out and find a way to deal with them, because these are NOT normal times and will render them insolvent in the long run. It’s NOT OK to promise a death benefit for participating when you have no intention or way of paying out when that time comes, charity or not.

[YitzyS]

That is great as a fundraising gimick until you hear people saying that they are relying on it instead of LI.

Dear askanim,

I know that you held a fundraising drive the last few days for Ploni, a father of 11 who passed away suddenly leaving his family destitute. I appreciate the kind gesture you did by raising 1.3 million dollars for the family. Unfortunately, you are terrible people. Had you left the family to wallow in their poverty, who knows how many more parents would have seen and purchased life insurance.

Hashem repays people who do mitzvos, but sadly, you are not they. I will pray for your souls as you rot in a very special place in hell.

Thanks for reading.


OR

as I said

Stop scrutinizing it

People can blame any good organization for it's downsides. "Without TAG, less people will have smartphones". Yes, maybe. But that doesn't outweigh their benefit. People think that just by being an organization, we can take them to task for every small downside.

[avromie7]

That has been my point. They should NOT treat these deaths like regular deaths. If they do, they will go under. They need to separate these out and find a way to deal with them, because these are NOT normal times and will render them insolvent in the long run. It’s NOT OK to promise a death benefit for participating when you have no intention or way of paying out when that time comes, charity or not.

based on the numbers posted above, the average year has 7 collections, with 2017 and 2019 being outliers and cancelling each other out. At that rate, right now they have around 11 months backed up but in 1 year from now that will be 6 months. They should come up with a long term solution, but the current situation is far from unworkable

[aygart]

Dear askanim,

I know that you held a fundraising drive the last few days for Ploni, a father of 11 who passed away suddenly leaving his family destitute. I appreciate the kind gesture you did by raising 1.3 million dollars for the family. Unfortunately, you are terrible people. Had you left the family to wallow in their poverty, who knows how many more parents would have seen and purchased life insurance.

Hashem repays people who do mitzvos, but sadly, you are not they. I will pray for your souls as you rot in a very special place in hell.

Thanks for reading.


OR

as I said

People can blame any good organization for it's downsides. "Without TAG, less people will have smartphones". Yes, maybe. But that doesn't outweigh their benefit. People think that just by being an organization, we can take them to task for every small downside.

I fully agree that it is great as a fundraising gimmick. There is nothing wrong with it being a gimmick. It worked for all of these people! I don't think that it is a sustainable system to be relied upon. I think the numbers show that very clearly. Therefore, any thoughts that it can be used as a reliable replacement for LI is misplaced. I think it would be beneficial for the organization itself to do a better job of stressing this point.

There is nothing wrong with scrutinizing it to point out its shortcomings. That is what can help improve the organization. Just because there are criticisms doesn't mean that they are terrible people. By making it seems that I am saying this you are in essence doing exactly what you wrongly accused me of.

[aygart]

based on the numbers posted above, the average year has 7 collections, with 2017 and 2019 being outliers and cancelling each other out. At that rate, right now they have around 11 months backed up but in 1 year from now that will be 6 months. They should come up with a long term solution, but the current situation is far from unworkable

Or the risk profile has evolved adversely. Which one is it? It is not currently unworkable but is showing signs of heading in that direction.

[ExGingi]

That is great as a fundraising gimick until you hear people saying that they are relying on it instead of LI.

Which is the point I made above. They should REQUIRE people to prove they have in-force Life Insurance (I'm not going to get into the amount or type of life insurance discussion), and provide an alternative ONLY to those who cannot get life insurance for religious or underwriting reasons (health usually cited, but there could be other reasons such as regular travel to risky countries, driving record, criminal record, bankruptcy, etc.).

[aygart]

Which is the point I made above. They should REQUIRE people to prove they have in-force Life Insurance (I'm not going to get into the amount or type of life insurance discussion), and provide an alternative ONLY to those who cannot get life insurance for religious or underwriting reasons (health usually cited, but there could be other reasons such as regular travel to risky countries, driving record, criminal record, bankruptcy, etc.).

Yes. I am not sure about requiring, but at least be very proactive about promoting it.

[yesitsme]

Which is the point I made above. They should REQUIRE people to prove they have in-force Life Insurance (I'm not going to get into the amount or type of life insurance discussion), and provide an alternative ONLY to those who cannot get life insurance for religious or underwriting reasons (health usually cited, but there could be other reasons such as regular travel to risky countries, driving record, criminal record, bankruptcy, etc.).

or rather have a checkbox "By signing I understand that this is not a life insurance replacement of any kind"