Author Topic: LIFE INSURANCE  (Read 139292 times)

Offline aygart

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Re: LIFE INSURANCE
« Reply #960 on: December 13, 2023, 10:07:18 AM »
Unlike the first 3 listed, this also applies to Lifeshare

It is the biggest question yet remains unmentioned much of the time.
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Re: LIFE INSURANCE
« Reply #961 on: December 13, 2023, 01:33:29 PM »
Yeah, seems like it. I think Areivim would be fine if

1) They made it clearer that they are supplemental, not a replacement for life insurance.

2) Every member was promised a payout, not ďThe rabbanim will decide if they think you really need it.Ē

3) The payouts were lump sum (soon after verifying death and medical records).

4. It could be sustained without the need for new enrollments

5. Lack of transparency

Why is Areivim listed as a religious organization to be exempt from filing a form 990? If theyíre a charity then they should be registered as one and file accordingly.
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Re: LIFE INSURANCE
« Reply #962 on: December 13, 2023, 01:41:05 PM »
Yeah, seems like it. I think Areivim would be fine if

1) They made it clearer that they are supplemental, not a replacement for life insurance.

2) Every member was promised a payout, not ďThe rabbanim will decide if they think you really need it.Ē

3) The payouts were lump sum (soon after verifying death and medical records).

L:ifeShare seems to check these boxes. They technically don't "guarentee a payout" since it's contingent on members participation in the collection at the time of payout, but they have no rabbinic oversight/evaluation of need and claim to quickly pay the family directly.
« Last Edit: December 13, 2023, 01:44:40 PM by AsherO »
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Offline yuneeq

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Re: LIFE INSURANCE
« Reply #963 on: December 14, 2023, 02:56:40 AM »
Yeah, seems like it. I think Areivim would be fine if

1) They made it clearer that they are supplemental, not a replacement for life insurance.

2) Every member was promised a payout, not ďThe rabbanim will decide if they think you really need it.Ē

3) The payouts were lump sum (soon after verifying death and medical records).

Lifeshare has the advantage on 1/2. On #3 - if youíre referring to the fact that funds are usable immediately for funeral expenses and the like vs going into an orphan fund account for future use - Arevim has a far higher payout per family. If thereís 5 kids and a wife theyíll receive $900k vs $100k-250k from Lifeshare. They can easily use the wife allotment of $150k to cover it.

Comparing apples to apples - Arevim pays out 150k per child + spouse and charges members $10.50 for each one. LS charges $14 for 100k total payout, or $32 for 250k payout. Iím not sure why LS is aiming for a group size that is exactly half the size of ARís, or why the 250k coverage is relatively cheaper in comparison to the 100k plan. If itís all going to the family then it should be exactly 2.5x more expensive than the 100k plan.

Also the $25 annual fee LS charges for overhead seems expensive, assuming 1 death per month (based on their estimates), their overhead is 15% of the 100k plan annual payments. OTOH Arevim doesnít disclose or split out overhead, which means itís coming out from member costs, so itís impossible to know how many extra members need to be added to the group just to cover that. Youíre paying for overhead one way or another.

Another point of difference is Arevim is tax deductible while life share isnít. Iím guessing that has to do with the guaranteed payouts.
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Re: LIFE INSURANCE
« Reply #964 on: December 14, 2023, 07:29:36 AM »
Lifeshare has the advantage on 1/2. On #3 - if youíre referring to the fact that funds are usable immediately for funeral expenses and the like vs going into an orphan fund account for future use - Arevim has a far higher payout per family. If thereís 5 kids and a wife theyíll receive $900k vs $100k-250k from Lifeshare. They can easily use the wife allotment of $150k to cover it.

Comparing apples to apples - Arevim pays out 150k per child + spouse and charges members $10.50 for each one. LS charges $14 for 100k total payout, or $32 for 250k payout. Iím not sure why LS is aiming for a group size that is exactly half the size of ARís, or why the 250k coverage is relatively cheaper in comparison to the 100k plan. If itís all going to the family then it should be exactly 2.5x more expensive than the 100k plan.

Also the $25 annual fee LS charges for overhead seems expensive, assuming 1 death per month (based on their estimates), their overhead is 15% of the 100k plan annual payments. OTOH Arevim doesnít disclose or split out overhead, which means itís coming out from member costs, so itís impossible to know how many extra members need to be added to the group just to cover that. Youíre paying for overhead one way or another.

Another point of difference is Arevim is tax deductible while life share isnít. Iím guessing that has to do with the guaranteed payouts.

- Areivim might pay more, since they pay per orphan, but they do not pay lump sum or immediately.
- I also wondered about the 250k payout not being 2.5x, maybe the pool size is different?
- At least the $25/year fee is transparent, assuming their overhead isnít more than that. For a pool of ~7,800 thatís like $200k a year, which isnít much considering transaction processing fees, office/technology costs, salaries, legal/accounting(/independent auditor?) fees, etc.
- I donít know why LS says they arenít tax-deductible, Google tells me 501(c)(8) donations are deductible if they are for charitable causes, collections for bereaved families probably qualify.

Some other notes:
- LS doesnít have any spousal coverage option so anyone wanting that would need to pay for two memberships/double payouts.
- LS stops paying out at 65, hard stop, so in that aspect itís a bit similar to term life insurance. I guess Arevim wouldnít pay out either if all the children of the deceased member were married.
- LS lists so many Rabbis who supposedly endorse them, but ironically donít say who founded or runs the organization, at least I didnít see it when I went looking on their website.
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Offline ExGingi

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Re: LIFE INSURANCE
« Reply #965 on: December 14, 2023, 07:34:53 AM »
What, if any, are tax implications to recipients?
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Offline yuneeq

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Re: LIFE INSURANCE
« Reply #966 on: December 14, 2023, 09:08:57 AM »
- Areivim might pay more, since they pay per orphan, but they do not pay lump sum or immediately.
- I also wondered about the 250k payout not being 2.5x, maybe the pool size is different?
- At least the $25/year fee is transparent, assuming their overhead isnít more than that. For a pool of ~7,800 thatís like $200k a year, which isnít much considering transaction processing fees, office/technology costs, salaries, legal/accounting(/independent auditor?) fees, etc.
- I donít know why LS says they arenít tax-deductible, Google tells me 501(c)(8) donations are deductible if they are for charitable causes, collections for bereaved families probably qualify.

Some other notes:
- LS doesnít have any spousal coverage option so anyone wanting that would need to pay for two memberships/double payouts.
- LS stops paying out at 65, hard stop, so in that aspect itís a bit similar to term life insurance. I guess Arevim wouldnít pay out either if all the children of the deceased member were married.
- LS lists so many Rabbis who supposedly endorse them, but ironically donít say who founded or runs the organization, at least I didnít see it when I went looking on their website.

-ďLifeShare is classified as a 501c(8) non-profit ďFraternal Beneficiary Society.Ē Since members receive the financial security of being in the community, their mutual-aid payments are not tax deductible. However, as noted, these payments are considered tzedakah.Ē

-Can you explain more about Arevim payout policy? I understood that they payout in full immediately upon approval (though with a more selective approval process this likely would take longer than LS), but for younger children they put the money in a trust. Is that not accurate? And they pay out in installments?

-It would be strange to have a group size of 7,142 for the 100k plan and 7,812 for the 250k plan. What would be the reason for that? Itís not like $35 is that much higher that they have to increase the group size. If anything they should increase both groups to double to cut the payment in half.

-LS structure is a lot closer to life insurance, but $32 would buy a lot more than 250k in term insurance for anyone healthy. Unless they were offering larger sums at much better ďpremiumsĒ I donít see a reason for LS to exist.
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Offline ExGingi

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Re: LIFE INSURANCE
« Reply #967 on: December 14, 2023, 09:35:44 AM »
-LS structure is a lot closer to life insurance, but $32 would buy a lot more than 250k in term insurance for anyone healthy. Unless they were offering larger sums at much better ďpremiumsĒ I donít see a reason for LS to exist.

IMHO all these efforts to provide something that tries to mimic life insurance (in providing a death benefit) by making it community based and non-profit are misguided at best. Commercial insurers have been in the business a long time and know how to price risk. They also exist in a competitive environment. The premiums charges are usually the most efficient.
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Offline knowitall

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Re: LIFE INSURANCE
« Reply #968 on: December 14, 2023, 10:55:53 AM »
IMHO all these efforts to provide something that tries to mimic life insurance (in providing a death benefit) by making it community based and non-profit are misguided at best. Commercial insurers have been in the business a long time and know how to price risk. They also exist in a competitive environment. The premiums charges are usually the most efficient.
I agree with you.

When Areivim did their big push earlier this year I asked one of the guys running it- ďI understand weíre trying to do away with parlor meetings for those uninsured. Why push Areivim? Why not show everyone how cheap they can be getting term life insurance?Ē

He said ďMany people canít get term for a cheap price due to weight, smoking, diabetes, other minor health conditions. If Areivim was made up exclusively of a pool of these people, the numbers wouldnít work. We need many with no health conditions to join too. Itís a small amount of maaser, and you can enable others that canít afford life insurance to protect their families.Ē


Iím just repeating what I was told, donít shoot the messenger 🤣

Offline Euclid

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LIFE INSURANCE
« Reply #969 on: December 14, 2023, 11:06:57 AM »
due to weight, smoking, diabetes, other minor health conditions
Minor?? lol there's a reason why insurance companies don't give good pricing for these "minor" conditions


ETA: I guess they mean not terminal
« Last Edit: December 14, 2023, 11:15:06 AM by Euclid »

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Re: LIFE INSURANCE
« Reply #970 on: December 14, 2023, 11:16:21 AM »
What, if any, are tax implications to recipients?

You mean when a family gets a disbursement? Its ostensibly taxable, I donít think thereís a way around that.
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Re: LIFE INSURANCE
« Reply #971 on: December 14, 2023, 11:21:53 AM »
-LS structure is a lot closer to life insurance, but $32 would buy a lot more than 250k in term insurance for anyone healthy. Unless they were offering larger sums at much better ďpremiumsĒ I donít see a reason for LS to exist.

Itís not that similar because you only pay when thereís a collection, and when you do pay, some months could be double ($64 instead of $32). Unlike insurance, thereís no extensive medical underwriting/classification, which could cause an adverse selection issue (not to be racist but Iím not sure your average middle aged frum person is as ďhealthyĒ on paper as your average American their age, though anecdotally life expectancy is kaĒh still the same or higher).

IMHO all these efforts to provide something that tries to mimic life insurance (in providing a death benefit) by making it community based and non-profit are misguided at best. Commercial insurers have been in the business a long time and know how to price risk. They also exist in a competitive environment. The premiums charges are usually the most efficient.

What about sales commissions?
« Last Edit: December 14, 2023, 11:25:17 AM by AsherO »
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Re: LIFE INSURANCE
« Reply #972 on: December 14, 2023, 11:24:55 AM »
-It would be strange to have a group size of 7,142 for the 100k plan and 7,812 for the 250k plan. What would be the reason for that? Itís not like $35 is that much higher that they have to increase the group size. If anything they should increase both groups to double to cut the payment in half.

I donít even understand how they cover payouts at all until each pool is full. And with Arevimís member count and them being the incumbent, itíll take LS a long while to build up the critical mass of their first pool for each payout amount.
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Offline whacked1

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Re: LIFE INSURANCE
« Reply #973 on: December 14, 2023, 11:25:24 AM »
I agree with you.

When Areivim did their big push earlier this year I asked one of the guys running it- ďI understand weíre trying to do away with parlor meetings for those uninsured. Why push Areivim? Why not show everyone how cheap they can be getting term life insurance?Ē

He said ďMany people canít get term for a cheap price due to weight, smoking, diabetes, other minor health conditions. If Areivim was made up exclusively of a pool of these people, the numbers wouldnít work. We need many with no health conditions to join too. Itís a small amount of maaser, and you can enable others that canít afford life insurance to protect their families.Ē


Iím just repeating what I was told, donít shoot the messenger 🤣
Who is the target crowd? I worked in a chassidish office where a lot of co-workers wouldnt get life insurance for haskafic reasons, not monetary. Would areivim resolve their issues?

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Re: LIFE INSURANCE
« Reply #974 on: December 14, 2023, 11:27:47 AM »
Who is the target crowd? I worked in a chassidish office where a lot of co-workers wouldnt get life insurance for haskafic reasons, not monetary. Would areivim resolve their issues?

That would depend on which Gedolim/Rebbes give haskamos/endorsements, more so if those Gedolim/Rebbes push the Arevim/LS/whatever product.
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Offline ExGingi

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Re: LIFE INSURANCE
« Reply #975 on: December 14, 2023, 12:45:13 PM »
You mean when a family gets a disbursement? Its ostensibly taxable, I donít think thereís a way around that.

Is it for a benefit from a ďFraternal Beneficiary SocietyĒ?

If it is taxable, that's a MAJOR drawback! Life Insurance death benefits are income tax-free (with very few exceptions which generally do not apply).
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Re: LIFE INSURANCE
« Reply #976 on: December 14, 2023, 12:46:36 PM »
What about sales commissions?

What about them? Do you think the people doing the work shouldn't get compensated?

I am not one bit embarrassed to say I earn a commission. In most cases the value of my work/knowledge/expertise to the client exceeds the amount of commissions I earn on the sale.
I've been waiting over 5 years with bated breath for someone to say that!
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Re: LIFE INSURANCE
« Reply #977 on: December 14, 2023, 12:50:11 PM »
What about them? Do you think the people doing the work shouldn't get compensated?

I am not one bit embarrassed to say I earn a commission. In most cases the value of my work/knowledge/expertise to the client exceeds the amount of commissions I earn on the sale.

Iím just talking objectively about costs. An employee working for a non-profit processing applications is a different compensation model than a paid sales agent. The latter has higher costs.

Obviously if LS has marketing/sales costs those should be factored into the equation.
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Re: LIFE INSURANCE
« Reply #978 on: December 14, 2023, 01:00:15 PM »
Iím just talking objectively about costs. An employee working for a non-profit processing applications is a different compensation model than a paid sales agent. The latter has higher costs.

Obviously if LS has marketing/sales costs those should be factored into the equation.

There are many other considerations. Think about the guy that bought a 30-year term and replaced it after 4, 5, or even 10 years. That became profitable for the company. Supposedly LS will have a lower lapse ratio to age 65 with 50-65 being my higher risk of paying out.
I've been waiting over 5 years with bated breath for someone to say that!
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Re: LIFE INSURANCE
« Reply #979 on: December 14, 2023, 01:13:21 PM »
There are many other considerations. Think about the guy that bought a 30-year term and replaced it after 4, 5, or even 10 years. That became profitable for the company. Supposedly LS will have a lower lapse ratio to age 65 with 50-65 being my higher risk of paying out.

Valid.
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