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Areivim USA is a dignified way to give צדקה. It is not Life Insurance and doesn't guarantee any sort of financial protection to its members. it is registered as a religious organization and as such isn't required to incur the additional cost of preparing and filing form 990 with the IRS.

http://www.areivim.info/rform.php

Eb228
Quote
I spoke to Areivim at length as I sell life insurance and wanted to best advise ppl that had Areivim already and wanted to supplement it with LI.
I was told that it has never happened that Areivim declined to pay out based on someones assets or LI. It has happened that the family told them they don't need the money, but they never told the family no.
Simple reasoning is, they also think that 100K per yasom doesn't really cover it, the program just won't allow for a higher payout at $28/ monthly. So they encourage everyone to have LI as well to make sure kids are adequetly covered, and owning LI does not disqualify a payout [unless each kid will receive over a million dollars etc].



Quote
They are tax exempt. Click on the below IRS link and then download the first attachment. Then search "Areivim USA"

https://www.irs.gov/charities-non-profits/tax-exempt-organization-search-bulk-data-downloads


This (I have been to a few Areivim meeting with these Rabbonim)

Harav Elya Brudny, Rosh Yeshivas Mir Flatbush;
Harav Yitzchok Isaac Eichenstein, Galanter Rav;
Harav Doniel Geldzahler, Rosh Yeshivas Ohr Yisrael;
Harav Binyomin Zev Landau, Tosher Dayan of Boro Park;
Harav Henoch Shachar, Rav of Klal Ohr Tuvia in Lakewood

Areivim Terms and Conditions (emphasis added):
Quote
4) Areivim USA is not life insurance. Areivim USA has been established primarily as a charitable endeavor and its halachic status is like that of all tzedakah money collected from the public. In the event of a the passing of a member r”l, all contributions can be made with maaser money.

5) In the event of (G-d forbid) a large number of deaths among members (as a result of a war, an earthquake, etc.), Areivim USA reserves the right to consult with its Rabbinical Board on proper procedures.

6) Members have no rights to sue or submit legal claims against the decisions of Areivim USA or its Rabbinical Board, including for failure to initiate a collection. There are no oral agreements or other commitments between Areivim USA and its members, and no such oral agreements or commitments shall be given any legal effect.

« Last edited by ExGingi on May 30, 2021, 11:11:03 AM »

Poll

Do you have Areivim & Life Insurance? (NOTE: Areivim is not life insurance)

Yes
49 (70%)
Only Areivim
21 (30%)

Total Members Voted: 70

Author Topic: Areivim USA - Coronavirus  (Read 140827 times)

Offline David61

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Re: Areivim USA - Coronavirus
« Reply #520 on: June 14, 2020, 12:14:20 AM »
I pay $118 monthly for 1million 30yr term 34 yrs old

20 year term, for 1 million, for same age, is less than half of that.

Attached are quotes for a 40 year old

« Last Edit: June 14, 2020, 12:19:22 AM by David61 »

Offline yungermanchik

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Re: Areivim USA - Coronavirus
« Reply #521 on: June 14, 2020, 12:20:19 AM »
+1
But I just signed up because of @YitzyS and @Chapshnell. Tizku L'mitzvos
I applied back on april 30. They called me on may 27 for my cc info and said they would email me before billing. I haven't gotten an email yet. So, it seems to me like:
They didn't say they're not accepting, they are just not processing the applications because they were busy with the Covid situation, i believe they will process it once they have a chance, and like you said they got a few hundred applications in just a few weeks so they didn't have time to get it done.
Small people talk about other people.
Average people talk about things
BIG PEOPLE TALK ABOUT IDEAS.

Offline ExGingi

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Re: Areivim USA - Coronavirus
« Reply #522 on: June 14, 2020, 12:22:31 AM »
20 year term, for 1 million, for same age, is less than half of that.

Attached are quotes for a 40 year old

Not for the same underwriting class.

And honestly, I'm not sure where the fixation with $1MM of coverage comes from. For most people I know that's simply underinsuring them.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline moko

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Re: Areivim USA - Coronavirus
« Reply #523 on: June 14, 2020, 12:32:02 AM »
20 year term, for 1 million, for same age, is less than half of that.

Attached are quotes for a 40 year old
I'm in the standard category :)

Offline David61

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Re: Areivim USA - Coronavirus
« Reply #524 on: June 14, 2020, 12:38:45 AM »
Not for the same underwriting class.

And honestly, I'm not sure where the fixation with $1MM of coverage comes from. For most people I know that's simply underinsuring them.

Well Areivim is even more underinsured (unless a person had more than 9 children) in which case they are certainly underinsured with 1 million of coverage.

Insurance agents love to sell bigger policies, but the point of life insurance (from a financial planning perspective, as I see it) is not to make the family whole from the financial impact, just to limit the downside, so they are not impoverished. After all. the premiums are expensive and priced to be in the odds of the insurance company (so life insurance is a bad bet to make from a purely financial perspective), except that it's a cost too high to bear, so one needs to make the bet (policy) for protection.

Getting more than $1 mil., becomes quite expensive, especially if insuring both spouses, and when considering cost of other insurances (homeowners and car). That can easily run $5K+/year combined, just on insurance.





Offline ExGingi

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Re: Areivim USA - Coronavirus
« Reply #525 on: June 14, 2020, 02:05:15 AM »
Well Areivim is even more underinsured (unless a person had more than 9 children) in which case they are certainly underinsured with 1 million of coverage.

Areivim isn't insurance. Period. Whatever it might provide is wonderful, but rather limited FWIU.

Insurance agents love to sell bigger policies, but the point of life insurance (from a financial planning perspective, as I see it) is not to make the family whole from the financial impact, just to limit the downside, so they are not impoverished. After all. the premiums are expensive and priced to be in the odds of the insurance company (so life insurance is a bad bet to make from a purely financial perspective), except that it's a cost too high to bear, so one needs to make the bet (policy) for protection.

Getting more than $1 mil., becomes quite expensive, especially if insuring both spouses, and when considering cost of other insurances (homeowners and car). That can easily run $5K+/year combined, just on insurance.

I know nothing about you, or your financial situation. I do know that for myself, as well as for most of my clients, the purpose of life insurance is generally to replace the financial value of the person insured.

When dealing with a widow and orphans, one wants to be able to provide a risk-free and worry-free cash flow. Given the current interest rate environment, what would $1,000,000 produce? Oh, and by the way, whatever it produces is taxed as ordinary income. Do we know how long that money needs to last? Do we know what curveballs will be thrown at the survivors? Do we know what it would take for them not to be impoverished?

I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online Euclid

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Re: Areivim USA - Coronavirus
« Reply #526 on: June 14, 2020, 02:19:25 AM »
And honestly, I'm not sure where the fixation with $1MM of coverage comes from. For most people I know that's simply underinsuring them.

I know nothing about you, or your financial situation. I do know that for myself, as well as for most of my clients, the purpose of life insurance is generally to replace the financial value of the person insured.

When dealing with a widow and orphans, one wants to be able to provide a risk-free and worry-free cash flow. Given the current interest rate environment, what would $1,000,000 produce? Oh, and by the way, whatever it produces is taxed as ordinary income. Do we know how long that money needs to last? Do we know what curveballs will be thrown at the survivors? Do we know what it would take for them not to be impoverished?
So IIUC if someone is only able to afford $X/month for term - then you'd recommend getting the largest plan possible for a shorter period e.g. 1 million for 30 years vs 2 million for 20 years (or whatever the equivalent length would be)?
« Last Edit: June 14, 2020, 02:26:10 AM by Euclid »

Offline ExGingi

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Re: Areivim USA - Coronavirus
« Reply #527 on: June 14, 2020, 02:40:14 AM »
So IIUC if someone is only able to afford $X/month for term - then you'd recommend getting the largest plan possible for a shorter period e.g. 1 million for 30 years vs 2 million for 20 years (or whatever the equivalent length would be)?

One thing I wouldn't do, is give generalized recommendations on a public forum. Life insurance is just one piece of a total financial picture. One needs to get a lot more of the picture in order to make a recommendation. And a lot of that information is private.

I am generally not a big fan of long-term level term insurance (except when it's part of a larger plan and not the only coverage in place).

As for the amount of insurance, let me ask you a question. If you would have a machine that produces X amount of $ per year, and you were able to insure it so that it's replaced immediately if it breaks down. However you would be given the option to insure it to be replaced with a machine that produces anywhere from 10% of the amount of $ that machine produces, to 200% of the amount it produces (with premiums varying accordingly). What kind of replacement insurance would you get? 50%? 10%? 100%?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

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Re: Areivim USA - Coronavirus
« Reply #528 on: June 14, 2020, 02:48:46 AM »
One thing I wouldn't do, is give generalized recommendations on a public forum. Life insurance is just one piece of a total financial picture. One needs to get a lot more of the picture in order to make a recommendation. And a lot of that information is private.

I am generally not a big fan of long-term level term insurance (except when it's part of a larger plan and not the only coverage in place).

As for the amount of insurance, let me ask you a question. If you would have a machine that produces X amount of $ per year, and you were able to insure it so that it's replaced immediately if it breaks down. However you would be given the option to insure it to be replaced with a machine that produces anywhere from 10% of the amount of $ that machine produces, to 200% of the amount it produces (with premiums varying accordingly). What kind of replacement insurance would you get? 50%? 10%? 100%?
Gotcha - for some reason I'd never thought of it that way...

I guess that's where laddering multiple policies comes into play...having 1 shorter term/larger payout and 1 longer term/smaller payout.


ETA: not sure if laddering is the correct terminology here...

Offline yitzf

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Re: Areivim USA - Coronavirus
« Reply #529 on: June 14, 2020, 03:17:41 AM »
Well Areivim is even more underinsured (unless a person had more than 9 children) in which case they are certainly underinsured with 1 million of coverage.

Insurance agents love to sell bigger policies, but the point of life insurance (from a financial planning perspective, as I see it) is not to make the family whole from the financial impact, just to limit the downside, so they are not impoverished. After all. the premiums are expensive and priced to be in the odds of the insurance company (so life insurance is a bad bet to make from a purely financial perspective), except that it's a cost too high to bear, so one needs to make the bet (policy) for protection.

Getting more than $1 mil., becomes quite expensive, especially if insuring both spouses, and when considering cost of other insurances (homeowners and car). That can easily run $5K+/year combined, just on insurance.
I pay $584 a year for 1 million 30 year term for my wife, and $1,400 for 2mm 30 year term for myself. It's money but relatively affordable.
« Last Edit: June 14, 2020, 03:30:07 AM by yitzf »

Offline David61

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Re: Areivim USA - Coronavirus
« Reply #530 on: June 14, 2020, 06:39:03 PM »
let me ask you a question. If you would have a machine that produces X amount of $ per year, and you were able to insure it so that it's replaced immediately if it breaks down. However you would be given the option to insure it to be replaced with a machine that produces anywhere from 10% of the amount of $ that machine produces, to 200% of the amount it produces (with premiums varying accordingly). What kind of replacement insurance would you get? 50%? 10%? 100%?

I'm glad you asked. I have exactly such a machine, its called a car, and I have the largest deductible I can afford. Sure it would be nice if in the event my $20,000 vehicle were totaled c'v that I get paid in full, but I could swallow a $2,500 loss, so I tolerate that risk. I don't buy insurance to eliminate risk, I only buy it to limit catastrophic risk, because I know it's economically its a bad bet.



Offline ExGingi

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Re: Areivim USA - Coronavirus
« Reply #531 on: June 14, 2020, 06:49:44 PM »
I'm glad you asked. I have exactly such a machine, its called a car, and I have the largest deductible I can afford. Sure it would be nice if in the event my $20,000 vehicle were totaled c'v that I get paid in full, but I could swallow a $2,500 loss, so I tolerate that risk. I don't buy insurance to eliminate risk, I only buy it to limit catastrophic risk, because I know it's economically its a bad bet.

Excellent economic thinking.

Now translate that into the life insurance. What amount of risk is the "deductible" you the surviving spouse can swallow in order to save how much in premium? (I would imagine that at a low enough marginal cost you'd consider a $0 deductible on the car - am I wrong?)
I've been waiting over 5 years with bated breath for someone to say that!
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Offline David61

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Re: Areivim USA - Coronavirus
« Reply #532 on: June 14, 2020, 07:15:26 PM »
Excellent economic thinking.

Now translate that into the life insurance. What amount of risk is the "deductible" you the surviving spouse can swallow in order to save how much in premium? (I would imagine that at a low enough marginal cost you'd consider a $0 deductible on the car - am I wrong?)

Yes. But the marginal cost is NOT low.

An extra $1000/year (for both spouses) over 40 years is $40,000, and once you include investment returns of ~10% that would have an economic value of ~$500,000).

Also the marginal benefit to the family from getting the second million is much less than the marginal benefit of the first million.

I.e. the difference between being left with zero and 1 million is huge (needing to downsize, rely on the community, cover tuition and wedding expenses etc.)
The difference between being left with 1 million or 2 million, is "managing" vs "never having to work another day in the surviving spouses life".

Also, the income earned on the policy after that is received is not necessarily taxed at ordinary income, but at long-term capital gains rate, if invested wisely. I don't see why its necessary to buy so much insurance that the surviving spouse can maintain all the principal till they reach 120.

Perhaps a more relevant question is:

What's a better a person put away $1000/year into an investment account, invest it at 10%, and have $500,000 saved up when they retire (but only carry $1 million of life insurance).
OR
The person spend an extra $1000/year on life insurance, and end up with $2 million if they die, but end up with zero savings at retirement?


 

Offline gozalim

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Re: Areivim USA - Coronavirus
« Reply #533 on: June 14, 2020, 07:25:39 PM »
I am generally not a big fan of long-term level term insurance (except when it's part of a larger plan and not the only coverage in place).
why?

Offline David61

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Re: Areivim USA - Coronavirus
« Reply #534 on: June 14, 2020, 09:28:14 PM »
why?

Its rare you need the same $ amount of coverage (over 30 years) e.g. when you are 34 and 64? (remember the payout is static, so inflation reduces the value)

So at some points you are probably significantly overcovered or undercovered. Remember the odds are in favor of the insurance company so you should only buy what you really need, in my view.




Offline ExGingi

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Re: Areivim USA - Coronavirus
« Reply #535 on: June 14, 2020, 09:38:13 PM »
Its rare you need the same $ amount of coverage (over 30 years) e.g. when you are 34 and 64? (remember the payout is static, so inflation reduces the value)

So at some points you are probably significantly overcovered or undercovered. Remember the odds are in favor of the insurance company so you should only buy what you really need, in my view.

Not my reasoning.

If a person feels they're over insured they can easily reduce the face amount.
I've been waiting over 5 years with bated breath for someone to say that!
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Re: Areivim USA - Coronavirus
« Reply #536 on: June 14, 2020, 09:55:48 PM »
Remember the odds are in favor of the insurance company so you should only buy what you really need, in my view.

That's a terrible way of looking at it. The insurance companies make money but that's what every business is designed to do.

You buy insurance because you are willing to take a 100% certain small loss (premium) to avoid an unlikely but catastrophic large loss. It's not about beating a system.

Offline avromie7

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Re: Areivim USA - Coronavirus
« Reply #537 on: June 14, 2020, 10:10:29 PM »
That's a terrible way of looking at it. The insurance companies make money but that's what every business is designed to do.

You buy insurance because you are willing to take a 100% certain small loss (premium) to avoid an unlikely but catastrophic large loss. It's not about beating a system.
-1 insurance is always a bad investment from an ROI perspective. The only reason to ever get insurance is to protect against a loss you can't afford. Anything more than that is a bad idea.
I wonder what people who type "u" instead of "you" do with all their free time.

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Offline Mordyk

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Re: Areivim USA - Coronavirus
« Reply #539 on: June 14, 2020, 11:27:27 PM »
Yes. But the marginal cost is NOT low.

An extra $1000/year (for both spouses) over 40 years is $40,000, and once you include investment returns of ~10% that would have an economic value of ~$500,000).

Also the marginal benefit to the family from getting the second million is much less than the marginal benefit of the first million.

I.e. the difference between being left with zero and 1 million is huge (needing to downsize, rely on the community, cover tuition and wedding expenses etc.)
The difference between being left with 1 million or 2 million, is "managing" vs "never having to work another day in the surviving spouses life".

Also, the income earned on the policy after that is received is not necessarily taxed at ordinary income, but at long-term capital gains rate, if invested wisely. I don't see why its necessary to buy so much insurance that the surviving spouse can maintain all the principal till they reach 120.

Perhaps a more relevant question is:

What's a better a person put away $1000/year into an investment account, invest it at 10%, and have $500,000 saved up when they retire (but only carry $1 million of life insurance).
OR
The person spend an extra $1000/year on life insurance, and end up with $2 million if they die, but end up with zero savings at retirement?
You are assuming they are living until the end.  If they die two years in then your calculations are way off.  Invested $2k and got $1mm is a pretty good return...
#TYH