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The Areivim "Life Insurance" Program
by Rabbi Yakov Horowitz

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5/17/10

Note to Our Readers:

The Monsey-based Areivim Program, led by Rabbi Shmuel Gluck, who is a regular contributor to this website, does extraordinary work with teens at risk and is not affiliated in any way with any of the three Areivim life insurance programs.

I warmly and proudly endorse the Monsey Arevim teen program -- as a resource for parents and as an excellent venue for your charity dollars.

Rabbi Yakov Horowitz

THE AREIVIM "LIFE INSURANCE" PROGRAM

Some Background:

From the moment I read about the Kol Yisroel Areivim “Life Insurance” Program, http://www.kolyisraelareivim.org., in which thousands of people form a cooperative group and contribute money via credit card to support the orphaned children of fellow members, I felt that this well-intentioned program pales in comparison to the protection offered by professional life insurance policies.

As a number of people have sought my advice regarding the Areivim plan, I thought it would be wise to commit my thoughts to paper and write a column about it.

Before doing so, I thought that it was only proper to reach out to the leaders of Areivim, inform them of my intentions, hear directly from them about the mechanics of the program, and ask them directly about the concerns I have. I posted an open letter on my website informing my readers of this plan, and received many responses from professionals in the field (actuaries, lawyers, and life insurance agents, among others)echoing my concerns and voicing additional ones.

The Director of the program, Mr. Yoel Bochner promptly returned my call and we had a very pleasant conversation about the Areivim program. We agreed that I would submit a list of questions and concerns, give him a few days to formulate a response, and then post my questions and his responses simultaneously on my website, and invite my readers to open a dialogue with him in a respectful and productive manner.

I was impressed by Mr. Bochner’s openness to the prospect of getting feedback, addressing the tough questions he may face from our readers, and possibly changing the way the program is run. We both felt that his organization will emerge from this process stronger and better positioned to serve the needs of our community.

Please find below the questions I posed and his responses to them.

I ask our readers to maintain a dignified tone in all comments that are posted on this thread. Hard questions are fine and in order, but in a Darchei Noam manner, please.

Thank you for your understanding and cooperation,

Yakov

----------------------------------------------------------------

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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1.     5/17/10 - 1:28 PM
Anonymous

I would never contribute to Areivim. He didn't answer any of the questions, but rather sounded like he was just reading off of prepared notes. Hiding behind "askonim" for financial information just really sounds like a scam, and saying they have hundreds of rabbonim, also sounds like a scam to me. Normally, if you want to sell a good item, you can just be truthful without hiding information. I guess his answers speak for himself.


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2.     5/17/10 - 2:02 PM
Anonymous

Does this program constitute an unlicensed insurance company and, thus, violate the laws of any state in which it is deemed to operate?


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3. Kol Yisrael Areivim - Contribution     5/17/10 - 2:03 PM
Anonymous

KYA Never took nor will ever take any contribution from any indevidual KYA will in case of a decaesed take the money to the Ruv what is in charge in any particular case


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4.     5/17/10 - 2:08 PM
Anonymous

I was unsatisfied with vague responses to clear and detailed questions. If the program is as good as it is claimed to be, they should have someone in a PR position to answer the questions raised.


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5.     5/17/10 - 2:11 PM
Lloyd - London

I commend you, Rabbi Horowitz, for presenting a lucid, respectful, well thought out and presented list of serious and relevant questions to KYA. If this witless, irrelevant reply by Mr. Bochner is indicative of the viability of the KYA plan, all those who are involved in this plan would do well to look elsewhere.


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6.     5/17/10 - 2:15 PM
Fotheringay-Phipps

Scam is a bit harsh. These guys are undoubtedly well-intentioned. But it's effectively comparable to a scam, in that it will inevitably collapse and leave the people who trusted them out of their cash. The fact that those who run it meant well will be of small comfort.

The only thing that strikes me as dishonest is their claim that actuaries endorse the plan. This is almost certainly untrue. I'd like to see a single actuary put his name behind this plan, but you won't see that happening. (I think an actuary who did this would probably be subject to disciplinary procedings at the professional bodies.)

A Yungerman in Lakewood was niftar a little while back and he was on this plan, and his family got very little. (He was related to a VIP in Lakewood, so his family was beneficiaries of an aggressive fundraising drive.) The Areivim people used as an excuse that not enough people had signed up, and they used this as the basis for a renewed enrollment drive.

Of course, the fact that people pay as rarely as they do is also the result of there being low enrollment, but they don't highlight this nearly as much.

In sum, people should ask people who know and understand these things. Relying on "askonim" for knowledge and guidance about things is one of the curses of this age.


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7. Life insurance     5/17/10 - 2:16 PM
Yoel Bochner

No it is not a life insurance of any sort.The only thing it does is to minumeise the embarresing compaigns that do not bring the results a shattered family needs in such a tragedy. Please buy term life insurance as much you can afford.


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8. I must have missed something     5/17/10 - 2:18 PM
Anonymous

Is there another part to Mr. Bochner's letter? I haven't seen teh answers to the questions I had, and which RYH's letter reflected:

Is this one organization or two?

Who are the rest of the rabbanim representing the broad spectrum he spoke of?

Who are the members of the Board?

Who are the CPAs and actuaries standing behind their projections?

Dialogue is wonderful, good and healthy. But evasiveness is not diaglogue.


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9. Answers please     5/17/10 - 2:28 PM
Anonymous

Rabbi Horowitz asked clear, cogent questions and represented a sincere impassioned perspective.

Please answer the questions.


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10. Response to 3     5/17/10 - 2:32 PM
Azriel

Presumably, the money flows through KYA since KYA hits each participant's credit card. And, in any event, why should anyone feel comfortable even if the money were to go straight to the Rav? Is the Rav investing the money?

There are no controls, there is no transparency, the program crowds out insurance, it may be illegal, collectability of contributions is dubious, and, most importantly, the math doesn't work (I would love to know which actuary signed off on this program. Every actuary I've talked to rolls his eyes at this structure). For the same $288 dollars a year that a person is liable for under this scheme, he could be purchasing hundreds of thousands of dollars a year in term life insurance (particularly at a young age). The same voluntary contributions that Arevim seeks could be used to help supplement insurance pools for those that can't afford the premiums.

This is a slow-motion train wreck unfolding before our eyes.


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11. Dear Yoel,     5/17/10 - 2:36 PM
WolfishMusings - Brooklyn, NY - wolf@wolfishmusings.com

Assuming you are the writer of the response to R. Horowitz, thank you for replying in this thread.

I'm a bit concerned about the fact that you encourage people to get life insurance and then say that those who do are ineligible to receive benefits.

While some (out of a sense of charity) with life insurance will continue to sign up, the vast majority will not. As a result, your pool of participants will be made up largely of those who cannot obtain/afford life insurance. Those are the riskiest individuals (in terms of possibility of paying out). In other words, while your plan had no "wiggle room" in a neutral environment, now you have to deal with the fact that the odds are stacked against you.

The Wolf


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12. Are they run by the same people?     5/17/10 - 2:41 PM
Kupat Ha'ir

If Areivim and Kupat Ha'ir are being run by the same group of "dedicated askonim" it's terrifying to contemplate where all the millions of dollars contributed to that Tzedakah have gone (other than to some very talented marketing firms).

Rabbi Horowitz - would you investigate Kupat Ha'ir as well?


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13. This tactic is what really drives me crazy     5/17/10 - 2:41 PM
Anonymous

From their website - testimonial

""…Almost immediately after I signed up for the KYA policy, I saw a drastic change in my life. Parnassah went easier; I was seeing nachas from my children, and in many other areas in my life, I was pleasantly surprised to see a real positive difference. Who would have though that such a simple Mitzvah can effect such massive changes…" Thank you for everything! Tzvi K. Monsey, NY"


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14.     5/17/10 - 2:42 PM
Anonymous

I think I may have to terminate our arrangement with Areivim based upon this dialogue, opting for proper life insurance. These answers were not to the point. Very disappointing as we have been contributors for a few years already.


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15.     5/17/10 - 2:51 PM
Amway

The questions Rabbi Horowitz asked were soft pitch questions, allowed the respondent ample time to answer, and were Aleph Bais of the program.

The answer from Areivim was a sales pitch without touching the topics being asked. The answer should be very helpful in deciding the merits of this program.


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16. wolffishmusings     5/17/10 - 2:53 PM
Yoel Bochner

people that dont buy life insurance do not die more then people that own life insurance. You will be supriesed KYA has a very big portion of sponsors Yoel


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17. almanos     5/17/10 - 2:58 PM
Anonymous

Why should the almona now have to beg for money from her "assigned" rov? Additionally you didn't answer any questions. Sounds a bit like a new kind of ponzi scheme to me. Buy life insurance its much more sound.


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18. Actuarially speaking...     5/17/10 - 3:03 PM
actuary

Of course the numbers don't work. Expecting less than 10 deaths from 16,500 people (note that the latest brochure says there is a payout for either the mother or father dying, meaning they now need less than 10 deaths from 33,000 people!) is foolish.

This topic has already been adressed by an actuary on the orthonomics site.


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19. Dear Yoel,     5/17/10 - 3:11 PM
WolfishMusings - Brooklyn, NY - wolf@wolfishmusings.com

First of all, thank you for responding directly to my query.

That being said, while it may (or may not) be true that people who don't purchase insurance don't die more often, you've actually missed the point. The point isn't about people who *don't* buy insurance, it's about people who *can't* buy insurance -- either because of pre-existing medical conditions or because their health/age makes insurance unaffordable for them.

The rules/regulations for Areivim actually cause your membership to be composed of those who *cannot* get standard life insurance -- and those people *are* more likely to die, thereby requiring payouts. I'm not convinced, however, that your model takes this bias into account.

Can you please provide more detail on this?

The Wolf


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20. Why do we do these things?     5/17/10 - 3:12 PM
Anonymous

Just because a financial plan or activity is home-grown within the frum community, it's not necessarily better than the standard, time-tested, well-regulated plans or activities that already exist in society. As a group we need to keep our egos in check and our antennas up.


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21. Term Life is still the way to go     5/17/10 - 3:12 PM
Yossie Abramson - Passaic, NJ

For the $28*12, a person would still be better off getting a 30 year term policy. R' Horowitz asked for names, and no names of any professionals behind this organization were mentioned. Furthermore, in one of the Areivim brochures it mentioned that having life insurance shows a lack of bitachon. Are you now repudiating that statement? It's really sad that for the very low amount of life insurance, people are too "frum" to purchase term life.


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22. Did Mr. Bochner answer the question?     5/17/10 - 3:21 PM
Yonah - Brooklyn, NY - yrytkohn@yahoo.com

Mr. Bochner's response does not answer any question besides naming a couple of their Rov's. Where does he talk about the financial concerns that R' Horowitz has, whether Areivim and its goals are even viable. There is a-lot of talk on avoiding embarrassing ad-campaigns that are costly as well, which is fine.

However, I would like to ask another question. How much money is raised from these campaigns for these families? Ideally, enough to cover all expenses in lieu of the breadwinner. If that is the case than the amount Areivim will provide is simply not enough.

Areivim is something that most will agree has the best of intentions. unfortunately, intentions are not enough. The previous model of ad-campaigns is wrong, that does not mean this model is right.

Respectfully,


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23. "Hundreds of Rabbanim" + Financials     5/17/10 - 3:25 PM
Anonymous

Many of these well-meaning Jewish organization hide behind the "hundreds of Rabbanim" line...can we see the names? why is everything so secretive? Can they post a copy of their audited financials so that "investors" can see where the money is going and being invested? I fear this will turn into another scam and there will be even more victims...


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24. Response to Mr. Bochner (16)     5/17/10 - 3:25 PM
Azriel

Lets assume you are right and a large percentage of the people in the program are sponsors and not beneficiaries. Let's assume 15,000 people in the program and that five thousand of them are sponsors only. The maximum proceeds (assuming everyone pays) would be 15,000 x 28 x 12 = $5,040,000. The target benefit is $100,000 so lets divide $5 million by $100,000. That equals 50. Lets also assume that each family has only four beneficiaries (a very conservative estimate given the target population which typically has much larger families), so 50 divided by 4 is 12.5

Are you suggesting that over the course of a year, it is actuarily sound that only 12.5 people will pass away in a population of 10,000?

(Of course, the numbers get much worse if you assume larger families or a smaller percentage of sponsors. The numbers also get much worse if you assume that the population in this program doesn't have to have a medical screening (and, by design, gets smaller and older over time).

And, this is just the math.

The lack of transparency, the lack of investment guidelines, etc., are a whole other set of issues.


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25. 2 looks like the same     5/17/10 - 3:30 PM
Anonymous

There are 2 programs that looks alike. I have never seen KYA saying something like that I watch them since theirr inception 4 years ago.


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26. Reply to R' Yoel     5/17/10 - 3:48 PM
ZB

I understand your saying that there is a big portion of donors who contribute to the pool, thus creating more money into the pot that won't be taken away by these individuals. Can you tell us roughly what percentage of the pot are donors?

Also while it is great that there are Rabbonim who have experience with tragedies and yesomim helping run the program, it would be much more comforting if those rabbonim were also actuaries and would be able to address all the complicated issues that come up in these situations. Some time having halachic and practical experience is not enough and a secular education is imperative in making the correct decision.

Finally, I second those who would feel more comfortable if the actuary who actually went over and validated this program would speak out and answer some of the more technical questions that are being asked. It would show more transparency and give confidence to future participants that this organization can actually do what it is claiming.


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27. Another point...     5/17/10 - 4:07 PM
Traklin

A few points:

A) I'm not sure where $28/mo comes from. That may cover one parent, but covering two parents for $500,000 would be close to the $40-45 range. Areivim covers both parents.

B) For those concerned that areivim is targeted to people who can't affort term life because age makes it more expensive, bear in mind that as people age they have less children at home. They would therefore receive less money.

C) To whoever wrote about having to beg for money from their "assigned" rov: I think you are misinterpreting the system. As I understand it, you can basically choose your rov, any rov you have a connection with and feel comfortable with.

D) I have my own issues with having a rov assigned, because I'm afraid most of them are not sufficiently savvy in the area of financial instruments.

E) I fully agree that things should be more open with regard to the names of rabbonim and askonim. On that point I felt Rabbi Bochner was being evasive. Who are the five askonim at central? I firmly believe if they are involved with the tzibbur in such a crucial way their names ought to be know. The same applies to the actuaries and other rabbonim supporting the program. R' Yoel, please elaborate.


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28. Where are the specifics?     5/17/10 - 4:14 PM
Anonymous

Where are the names of the rabbis who endorse it?

Who are the askanim who are managing this project?

What form, if any, of business entity has been formed?

Will the entity attempt to qualify for exemption from income taxes?

What will happen when the agency which regulates insurance in whatever state this entity operates closes it for being an unlicensed insurance company? Yet another instance of Chillul Hashem, where frum Yidden decide that the laws of the United States do not apply to what they want to do?


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29. Something rotten in Denmark     5/17/10 - 4:29 PM
Mel from Monsey

1. It may not be intended to be a scam, however, it will turn out to be a scam. Actuarial calculations are not as simplistic as you Mr. Bochner make them out to be.

2. When did the Rabbonim(who, of course are anonymous)become actuaries. It is a field that requires many years of study (not in a Beis Hamedrash). These are the same Rabbonim that tell our wonderful youngsters not to get a secular education.

3. There is no doubt in that this scheme is in violation of insurance laws in every state in the USA except Borough Park, Williamsburg, Monsey et al


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30. Shocked and appalled     5/17/10 - 4:45 PM
Holy Jew

people that dont buy life insurance do not die more then people that own life insurance. You will be supriesed KYA has a very big portion of sponsors Yoel

I am shocked and appalled the person that runs the organization is revealed to be so utterly clueless about the subject matter that is the focus of the tzedakah. It doesn't burnish his image any more that his responses are barely literate. How in Hashem's name did anyone let him take a dime from another Jew??

And lest anyone accuse me of being too harsh, consider that he runs an "insurance" program and doesn't understand even high school statistics. There's no way to sugar coat that.


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31. Oy     5/17/10 - 5:13 PM
HJ

The only thing it does is to minumeise the embarresing compaigns that do not bring the results a shattered family needs in such a tragedy

That sentence is so atrocious it might even qualify as a chillul Hashem.


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32. Pathetic     5/17/10 - 5:27 PM
jewinjerusalem

Mr. Bochner's response is pathetic. Wolf correctly noticed that if you have life insurance then you aren't eligble to receive money from this program. [Of course they are happy to take your money.]

So, is this program independent of the one in Israel or not? Is it legal? What are the names of the Rabbanim? The list of questions goes on and on.

R. Horowitz made a slight mistake. You assume that the same $28 buys a good insurance policy. Wrong. Insurance costs you $28. Arevim costs absolutely nothing. It's tzadaka deductible.

The gedolim are able to force [most of] the tzibbur to buy insurance. Just say you won't give tzadaka to one who doesn't take the necessary hishtadlus! It can be done, and it has been done in some US cities.

Bochner tells us the old system no longer works. Do you understand that system? It means one takes no responsibility for the future and spends beyond his means. When he dies owing large sums of money [that he never had any idea how he would pay back] then askanim create a keren to take care of the family. In other the old system was based on sponging off the other guy.

Buy insurance!


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33. To # 30. Shocked and appalled     5/17/10 - 5:44 PM
Anonymous

Just because he doesn't write English well doesn't mean he can't run an organization, perhaps English is not his first language. Please relax!


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34. CHARITY     5/17/10 - 5:58 PM
EN

To preface - I have signed up for the Arevim prgram over 6 months ago and have never had my credit card charged as of yet. As you can see clearly in the response that this is NOT a life insurance plan. I have bought my own life insurance plan and do not expect anyone to rely on this program as life insurance. If you do than you are disillusioned. This is CHARITY. That being said - this program makes sense in the fact that if someone dies - and the family desperately needs the money - instead of having a campaign to raise the family money - which incidentally now I will NEVER contribute to such a campaign if they were not smart enough to join such a simple plan - they would be able to speak to their local Rav who will in turn contact the askanim of this program - whoever they may be - it is not important because the Rav will - need to bring proof that there is such a deperate need for the family. Yes, there will be embarrassment on part of the widow and orphans - but what do they expect if the dead husband/wife could not afford life insurance - at least their faces won't be plastered and their name mentioned in shameful campaigns with no promise of funds. Only the Rav will be privy and they can tap into the minimal donation of many people. Most of the 16500 people will not be eligible for such charity and so statistically you won't have to pay out unless it is to the very unfortunate.

I as a donor won't have to worry that my tzedakah money is going to a scam because the safe guards are in place - a local Rav who vouches for the Orphans/widows need and the Askanim who double check to see that the Rav is saying the truth. Even if the Rav lies - how much will I loose? $28? Max $288? That is less than I would loose if I write out checks to all those Tzedakah collectors that come around begging for the poor orphans and Almanos.

Additonally all the advertizing funds should go to this one Tzedaka and none to any other who is campaigning for an Almana/Yasom. Those who think to join to get "free life insurance" please don't bother because that is not what this is. It is not illigal because it is a CHARITY. I am tired of having all those collectors crying about some poor orphans and that they need so much money for weddings etc. - if they are so poor - join this group and help your fellow Jew with a few dollars max a month if they die - If no one dies than nothing is taken out - And really, statistically how many destitute people die and need to rely on Charity - not many -

There should be a central organization for such funds. The more people acknowledge this the less room there is for fraud. Who is going to cheat me? A local Rav and some Orphans banding together to make up a story? A death is not something you can hide. Never again will someone sucker me into giving money to Orphans or widows. I'll tell them why didn't you join the group when you were alive - there was nothing to lose.


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35. actuary reacts     5/17/10 - 6:54 PM
Anonymous

The closest analogy to the Areivim program would be a rabbi in a small shul finds out that some kehilla members are having trouble with parnasse and not able to put milk on the table. Instead of raising the money to purchase milk from a grocery - milk that has been pasteurized, homogenised, passed all FDA standards from animal health to safe packaging - the rabbi buys a cow, ties it to the back table and invites all to milk the cow on way home from shul.

Why recreate a life insurance product, when America is the home to the most competitive life insurance market in the world? Competition has reduced profit margins to near zero, and products are regulated by state to insure solvency.


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36.     5/17/10 - 7:51 PM
moshe pick it up - new york

Yankie, once again a masterpiece you covered all the bases.


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37. Sunlight is the best disinfectant     5/17/10 - 7:59 PM
gadolwannabe - New York - attrn7@aol.com

Rabbi Horowitz asked some very direct and relevant questions. In response he got general and vague answers.

I am an attorney and I have had many aksanim come to me with ideas as to how to make a few dollars while helping Klal Yisroel. Let's be honest. There is a profit motive here. That is why you do not have the names of the Board of Directors, Rabbanim and aksanim publicized. They are afraid that the Attorney General's office will look into this program. There are many violations of the Insurance Law that are being perpetrated.

Rabbi Frand once said that there is one Prime mitzvah in the Torah: the prohibition against Chillul Hashem. Every other mitzvah is just a geder for the Prime.

Unfortunately, we have not learned from the ganeivishi shtick that has been going on and, I am afraid, that this will be another black eye for frum Jewry.


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38. Every Responsible Parent Should Buy Term Insurance!     5/17/10 - 8:22 PM
Judy - Brooklyn, NY

I was called so many times by Areivim in the past few years. Each worker calling me was receiving over $20. an hour, based on my interviewing one of these callers. By the time I had finished speaking with her, I had convinced her to buy term insurance asap, and told her that NO! I would not donate or become a member.

After telling her that I have as much insurance as I can afford, she asked me if I would just be a donor. I told her that I have just been approached by the Rav of our shul to donate money for a family on our block that just lost their breadwinner. The entire shul was getting together to raise all the money for this large family. We were all giving as much as we could. All this was done, quietly, respectably, without any ads, without any fanfare. It is the responsibility for every parent, as part of the wedding expenses, to buy a term policy for the couple, and increase it when necessary. A term policy costs a few hundred dollars a year, and it is a small price to pay for peace of mind. Just as we have car, home, and other insurances, it should be a requirement and a necessity, not a luxury. Until the couple can afford to pay it on their own, it is the minimum parents can do for their children.

If someone wants to start an organization, it should be one to educate young adults about insurance and responsibility. People are mistaken when they think they cannot afford insurance, due to insurance salesmen only trying to sell whole life, where the salesmen make more money, but the person can't afford the payments. There is no need to buy whole life, unless one can truly afford it. But term life is necessary and very important.

I started out each of my children with a million dollar term policy for a few hundred dollars a year. A hundred thousand is nothing in today's dollars!

Areivim will never succeed, because it is based on foolishness.

The answer had no answers, only more questions.

Rabbi Horowitz, I am sorry you were orphaned at the age of less than 4, but with this article if you will help just one family to help themselves and bear responsibility, you will be doing a service to possibly many more future (C"V) orphans.

Thank you so much for your clear and straight forward article. Someone has to expose the stupidity in this world. True it is hard to find honest insurance brokers, but they are out there. You can interview several and get quotes before you decide what to do.

There are plenty of books out there to study what every family needs to know. We need to get the proper education in order to succeed.

Getting insurance is not a lack of bitachon, it is a responsibility. Just as you would not drive or have a home without it, the same way you need to insure your children and wife against possible catastrophe.

I think Rabonim should tell people that it is a segula to arichus yamim to purchase life insurance. Term insurance is cheap, and it will be there for you if you should C"V need it.


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39. I'm signed on as a donor, do I pull out?     5/17/10 - 8:31 PM
LB - Detroit

B"H I have more than enough life insurance for myself and my family, and I was signed on under Option 2 which basically means that every time someone died, they made a collection from my credit card of $6 per child, but they will not have to pay my family anything. I felt good about providing help for yesomim and almanos.

Rabbi Bochner's vague and cryptic answers leave me feeling very uncomfortable, do I pull out or not?

On one hand, I want to continue to support yesomim and almanos...

On the other hand, I really don't know if this organization is being responsible AT ALL, and maybe I'm just enabling a well intentioned but potentially damaging organization to keep up this pseudo-insurance...

WHAT DO I DO?

Rabbi Horowitz, Thank you for getting us this far, PLEASE follow up with your recommendations/feelings on the matter.

Thanks, LB


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40.     5/17/10 - 8:35 PM
Anonymous

Mr. Bochner, why do you think this is not a form of life insurance? In general, if you engage in the business of issuing insurance contracts you must be licensed with the individual states in which you conduct business and are subject to a host of substantive regulation. The definition of insurance contract may vary from state to state (though I think they are the same or at least very similar in most, if not all states).

In New York it is defined to mean any agreement or other transaction whereby one party is obligated to confer benefit of pecuniary value upon another party dependent upon the happening of a fortuitous event (definition is somewhat abbreviated for ease of reference).


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41. Donors - Pulling out     5/17/10 - 9:31 PM
Anonymous

I am not convinced that a donor who is disillusioned with the poor PR performance of this program should pull out. But I fail to be convinced that there is a benefit to staying in it. Several comments, as well as more than tolerable experience, indicate that there are ample opportunities to provide tzedokoh to support almonos and yesomim. One does not need an organization for that.

I digress. Many years ago, there was an organization that raised money in America for various programs in Eretz Yisrael. It was a household name. There were meshulachim that canvased America, and children as well as yeshiva boys were asked to participate in fund raising. This organization has a large office, employing quite a few people. I have no reason to suspect that there was any dishonesty in that operation. However, the money collected never reached anyone in Eretz Yisrael, having covered the expenses of the large office staff in US. B"H that organization has disappeared, and it is chaval that the former employees needed to look for other jobs.

Running an organization is a costly venture. Those expenses, even when many of the consultants are pro bono, are massive, and will rapidly reduce collected funds - rendering all the math above irrelevant.

If I am aware of someone who needs tzedokoh, I will look for ways to provide it without the reductions that will occur through any organizations. That is the "real" tzedokoh.

While I'm not so sure about pulling out, I would certainly not consider this organization a priority if my desire is to support yesomim.


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42. This not a life insurance     5/17/10 - 9:52 PM
Yoel Bochner

Life insurance is a contract between the life insurance of the company the insured pays and agrees to pay a certain amount (premium) and the life insurance company agrees to pay the dead benefit read this link for defenition and differences the KYA program is far from one http://en.wikipedia.org/wiki/Life_insurance


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43. Sponsor     5/17/10 - 9:56 PM
Yoel Bochner

First in foremost thanks for sponsoring to the KYA program. I would really like you should pin point me what issue was not touched in the response. there is one answer that was itentionely left unclear and that is the names of the proffesionals the KYA was working with. Yoel


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44. to #39 -- LB of Detroit     5/17/10 - 10:01 PM
YH - Monsey/NY

LB: I am not in a position at present to tell you to withdraw from Areivim.

However, as for your noble wish to assist people (and c'v possible yesomim) with financial assistance/security; why don't you simply place a phone call to the President or Dean of your child's school(s) and offer to help underwrite life insurance for the rebbeim and moros of the school?

Perhaps get a few friends of yours together and cover the entire school's employees?

Like this, you will know exactly where your hard-earned charity dollars are going -- and 100 cents of every dollar will go to your intended person.


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45.     5/17/10 - 10:02 PM
Yoel

Judy, I can't agree with you more. It is a fact that not every Shul have done and do what the Shul you are a member did for the deceased member. No one can deny the fact that these capaigns do happen and KYA can be a very big help that these compaigns should indeed not happen.


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46. gadolwannabe,     5/17/10 - 10:06 PM
Yoel

I really dont believe what I just read from an attorney, an attorney should know better then that.


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47. How do you spell P*O*N*Z*I     5/17/10 - 10:50 PM
New York attorney - New York

This is a ponzi scheme, an affinity fraud (a fraud that involves relying on people within one's own community trusting them), a not for profit fraud (probably run through some yeshiva or charity despite its profit motive), an insurance fraud (yeah, its selling "insurance" without a license). Oh, yeah, but Mr. Bochner is well intentioned. Sure. Hats off to you, Rabbi Horowitz!


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48. Anyone Else?     5/17/10 - 11:09 PM
Dovy - NY, NY

Is there anyone else out there who gets the feeling that Yoel Bochner might be some high school kid trying to make a buck?


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49. Dissapointed in Rabbi Horowitz's claims     5/17/10 - 11:25 PM
Mark

While I certainly appreciate Rabbi Horowitz's questions, I have a few of my own to pose to Rabbi Horowitz.

1 - You claim to keep an open mind, but emphatically state your opinion that this is not a good program...Well, which is it?

2 - You seek transparency. I couldn't agree with you more. I too, am troubled by the lack of it. However, I wonder why you don't offer the same transparency with your organization and claims. You've written hundreds of articles, some of them quite bold and critical of the frum world. You CLAIM to have the backing of "rabbanim" but you never actually name them. When I asked for some names a few years ago, you promised to provide them but then refused to do so. Who do you run your articles by before printing them? I've shown some of them to some fairly well-known gedolim who are reputed to be your backers and they claim that they don't agree with your position at all [in certain instances.] Why not share with us the names of those who do?

I am unsure about Areivim and appreciate your questioning of them, but I wish you'd adhere to the same standard you ask of others.


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50. What could possibly be the reason?     5/17/10 - 11:57 PM
Orthonomics

As per Yoel Bochner there is one answer that was itentionely left unclear and that is the names of the proffesionals the KYA was working with. Yoel

What possible reason could there be to omit the names of the professionals you have worked with? When I used to work in audits, my supervisor and managers signed off on my reports, as did the head of the division. You are asking the public to rely on your work you refuse to provide the names of those who have done the background work for your organization. Where I used to work, if you worked on a single workpaper, you signed and dated it. This is ludicrous.


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51. confused     5/18/10 - 12:51 AM
Sarit

In the event of a member’s passing, the agreed-upon fees will be collected from the group's members.

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.

Am I understanding the above correctly? Once there is ch"v a tragedy the group members are expected to contribute, but they are free to drop out also. Would be better if money were collected in advance.

It's also a good point that Rav Horowitz makes that KYA doesn't seem to reference actual mortality statistics, so that the anticipated maximums and payouts might be unrealistic. Although it would be great that through the zechus of areivus Hashem gives these members long life and health.

I'm personally concerned that any public "save the children" efforts reinforce the tendency for one not to do his own hishtadlus, knowing that at worst ch"v there are programs to pick up the pieces from poor planning.


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52.     5/18/10 - 2:01 AM
Anonymous

Dear Rav Yoel, I have 2 questions that surprisingly haven't been asked yet: 1- do you make money off Arevim? Does Arevim have management overhead at all? (offices, salaries etc) are any of these expenses deducted from the 6$ ? 2- Do you take into consideration that credit card transactions cost money? Out of $100,000, visa mc and Amex will chump off minimum $5000. Is there a different way to contribiute?

Anyhow, I do realize that you mean well, and I hope you sill never get discouraged by the hoards of naysayers. For every negative comment-writer troll there are a bunch of people somewhere that agree with u but have better things to do than thinking of a good poster name.


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53. Yoel, It's Time to Answer     5/18/10 - 10:27 AM
Askan - Chicago

Mr. Bochner:

1] The website explains that, “The money is collected and the funds are then invested with the help of a financial planner to ensure long term growth. Interest payments from the investments can then be used to help offset daily needs and costs, while the principal is available for major expenses such as marriage”.

What yearly percentage return are these investments supposed to deliver? A low estimate of daily needs and costs per person, per year is minimum 10K. This means that the fund must return a yearly m-i-n-i-m-u-m of 20% yield, regardless of market fluctuation. The last guy who claimed to deliver that is already in Butner, North Carolina Federal Prison for the next 150 years. His Monsey based accounting firm is also in jail for signing off on his guaranteed 20% yearly yield.

Are your financial planners promising at least a 20% yield??

2] What are the fees paid to this financial planner who guarantees such fantastic returns? Are they paid annually or per transaction?

You say that ‘every penny goes directly to the family’, which the average English speaking person takes that to mean that there is no overhead on the part of the fund. S-o-m-e-o-n-e IS making money off of every transaction. Investors aren’t stupid nor were they born yesterday.

3] Bonei Olam and RCCS offer a service of a tangible benefit (i.e. a high risk insurance policy) to be used exclusively for a specific struggle a family is facing. The community sees a benefit and understands the gains to the individuals served by the programs. This is why fundraising is successful.

Why isn’t your organization focusing its efforts on negotiating both cheap and high risk life insurance policies so that everyone benefits from the affordability of a service sold to all Americans, instead of trying to reinvent the wheel??

BUT….BESIDES FOR ALL THE ABOVE VERY OBVIOUS QUESTIONS, THIS IS THE MOST GALLING CLAUSE IN YOUR TERMS AND CONDITIONS:

4] “The program is designated only for orphans who are Torah-observant!”

As many people on this forum are aware there are many children who are abused in the frum world. It is known that children from families in crisis (sick parent, single parent families) are more vulnerable to be taken advantage of. It is also known that the long term effects of this abuse often lead to an increase of at-risk behaviors or a temporary dropout of torah observance.

This clause in the terms and conditions gives the program v-e-r-y wide latitude to summarily reject some of the neediest children. Can you kindly define the term ‘Torah observant’?

Does this mean that if an unmarried orphan child at 19 goes off, his case is considered closed and it is "as if he died and the funds are returned into the ‘pot’ for further use?"

YOEL: You can choose to ignore questions 1-3, you’ll be asked them one day but hopefully you are wise enough to have an attorney at your side. But, we NEED an answer right here on this forum to #4.

Rabbi Horowitz is looking out for the children, what about you????


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54. A LI professional who wishes he could help out     5/18/10 - 1:44 PM
LifeAct

The commentors here have highlighted some of the most important problems with the plan, but I believe that if KYA wants to do it right they could fix the problems. The important problems are (at least):

1) Anti-selection: KYA will naturally be composed of the worst possible risks, both in terms of death risk and payment default risk.

2) Compliance with State Laws: As an insurance product, KYA would have to be licensed in every state it operates. Licensure is an additional step above actually complying with reserve and capital requirements, disclosures, statement of AO, etc.

3) Mis-Pricing: The maximum premiums are woefully low compared to expected DB.

4) Fund Management: Lack of transparency is a red flag when money is involved. The askanim must publish their names and accounts, somehow, without jeopardizing the privacy of the beneficiaries.

5) Lack of Clear Standards: Distribution of funds phraseology contains ambiguous stipulations that can lead to abuse.

6) The Absence of the Names of Members of Program's Professional Teams.

If KYA would simply limit their reach a little bit, I believe that these issues could be surmounted. I am a life insurance actuary with significant experience in pricing, valuation, and compliance. I suggest the following:

A) Clean up the troubling payout clauses and rectify the fund management issues: It is outside my professional expertise to recommend HOW to fix this, but the existence of these problems is what prevents me from lending my credibility to the aspects of the program that I am qualified to advise on. I expect that this is why no professional is allowing his or her name to be disclosed.

B) Desist from calling this insurance: This can be achieved in a simple way. Instead of a group with Option 1 and Option 2, I recommend two separate groups - a paying group and a benefit eligible group. The benefit group would NOT give their credit card numbers and would NOT pay upon the death of a group member. The benefit group would have to meet qualification standards for receiving tzedaka (and requalify periodically).

The paying group would be made up of donors only. No qualification necessary, and the donations would be tax deductible if the organization meets 501(c)-3. The size of the donor group relative to the benefit group and the size of the donation per death would have to be carefully monitored and optimized. The size of the group and the size of each donation would determine the maximum donation per month, and this should be carefully matched to the expected mortality of the benefit group, based on GI (guaranteed issue) mortality to limit the effects of misrepresentation.

This would clear up any issues of compliance with insurance regulation, as the program would not be insurance. It would also have the benefit of NOT MISLEADING THE PUBLIC into thinking that they are buying insurance through KYA.

If KYA can take care of #1, I (and I am sure other professionals) would be glad to lend my services and credentials to creating a feasible long-term tzedaka raising program.


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55. please interview Areivim, YOu only intervied Kol Israel Areivim     5/21/10 - 1:18 AM
Anonymous

It seems that there are two organizations! KYA is the one you interviewed, Looking at the Areivim website, it shows many well-known community tzedakah organizations approving this plan. Rabbi Horowitz, would you be able to call up the second organization, and see how they respond? Somehow I have a feeling that they would answer your questins in a more direct fashion. Or you can call our neigborhood Monsey Kupath Ezra, and ask them what they think of it, because their logo is on the Areivim website.


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56. A mussar haskel...     5/21/10 - 5:44 AM
Asher Lipner, Ph.D. - lipnera@gmail.com

“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.”

The comparison of this issue with the problem of child molestation is apt on many levels. Aside from the foolishness of trying to reinvent the wheel in unprofessional ways based on zero research and knowledge of the issue, there is another psychological dynamic that we see in both areas. That is the fact that for so many of us in judging askanim and their approaches to problems, the idea of “Dan L’kaf Zchus” is taken to such extremes as to make the whole concept dangerously absurd.

Why, if so many people here can so easily point out that the organizers of KYA are clearly intent on hiding such important information about their activities as the names of the rabbis and professionals they work with etc., do we all still insist that they are “well meaning.” Why do we choose to believe with the “complete faith” of one of the 13 Principles of the Rambam, that even if what they have created becomes yet another community scam and Chillul Hashem, the askanim involved are good people who only want to help others?

When will we learn that if it looks like a duck, walks like a duck and talks like a duck, it is not a “holy cow”? The amount of pain and suffering that has been caused by giving all Jews a Chezkas Kashrus even when their activities raise red flag after red flag is astronomical. Get rich quick schemes that bilk people out of their life savings, kabbalists that promise “miracle blessings” for the right price, pedophilic teachers and counselors who “volunteer” to “get close to” children, and leaders who sweep abuse under the carpet rather than sufficiently warn parents and stop abusers are all allowed to ply their trade in our circles. Even people who have been caught doing evil get chance after chance, saying they have done Tshuvah. It is as if we believe that every Jew is a tzadik like Moshe Rabeynu, and can always be trusted no matter what they are doing. Surely if a Jew breaks into your house at night, the mitzvah to judge favorably does not mean you should assume he is coming to deliver early shaloch manos!

Reb Yankie, would you not agree that many of the people who try to avoid utilizing the police to protect children are far from “well meaning?” And even those who have some amount of lesheym shamayim had plenty of inner “negius” created by all kinds of yetzer harah:

Firstly, there are those who are related or close friends with molesters who want desperately to protect their close circle of loved ones no matter the price to be paid in blood by other people’s children.

Then there are those who see confronting molestation as an embarrassment to the community they live in and selfishly believe that it is better some little ones should suffer than the adults should be embarrassed. Some community leaders do not want the government “mixing into” our affairs and see police involvement as the district attorney “making a power grab from the rabbis”.

Financial considerations also play a key role in cover-ups, as institutions can be held liable for child abuse that has been perpetrated on their watch if they were negligent or knowingly ignored the abuse by staff members. Is it not less than “well meaning” when people put financial considerations above the value of child safety?

Aside from greed, cronyism and power hunger, another motivation is arrogance. Askanim and rabbanim often refuse to believe that they are not able to solve all of Klal Yisroel’s problems (be they impoverished widows and orphans, abused children, teenagers going off the derech or shalom bayis issues) all by themselves, and they are highly motivated to use their own methods to try to prove these delusions of grandeur are true.

Finally, we best not forget good old fashioned peer pressure, or the fear of “what others would say”, what the Chovos Halvovos calls “chanifa”. The Yetzer Harah that tells people not to do the right thing if it is unpopular because you care more about being honored in the eyes of people than in the eyes of Hashem, or you fear public backlash from other members of the community as we are warned not to do in the Lav of “Lo Saguru Mipnei Ish”. Anyone who has publicized a child molester in our community or has gone to the police can tell you about the punitive reactions of many of the “powers that be”. Winston Churchill famously said “the path to hell is paved with good intentions”. This is true because as the Chovos Halvovos points out in the author’s ancient use of “depth psychology”, good intentions are not always what they seem.


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57. A solution perhaps?     5/21/10 - 10:23 AM
Lloyd - London

Despite its best intentions, KYA is obviously not a viable program. It should be dismantled before it turns into another Ponzi scheme. However, here's an idea that just might work: My sons' yeshiva has a special fund for their rebbeim which pays for life insurance for them. Parents are asked to contribute $50 per year toward this special fund. Any rebbi who finds it difficult to pay for his life insurance premiums may make use of this fund for this purpose *only*. Using this template, someone should start a special GEMACH which will help pay the premiums of those who cannot afford life insurance on their own.


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58. who is Areivim?     5/24/10 - 2:36 PM
gadi - baltimore - gadibrody@gmail.com

Rabbi Horowitz

Have you spoken to Areivim @ http://areivim.info/?

They are totally different, I should say separate programs.

I would like to know what they would say.


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59. Why so many Areivim programs?     5/25/10 - 1:08 AM
Anonymous

I see at least 3 Areivim programs websites.

www.kolyisraelareivim.org

www.areivim.info

www.areivimusa.org

The idea obviously sold very well, if there is so much competition.

I am a member of one of the Areivim organizations. I have life insurance. I joined because I thought it was a nice way to give tzedukah.

The have charged my credit card 4 times already. They always call before with a voice recording to let us know of the charges.

To sum it up, should I trust these people that my money is going to orphans or not.

Also why does the orphan have to wait to use the money until he is married. How exactly should he live on until then.


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60. Probably well intended but looks like a scam     7/26/10 - 9:40 AM
Anonymous

In addition to the questions asked by the Rabbi, it really bothers me that the yatomim have to wait till they get married to get the money. The almana and yatomim need money at the time of death, not 20 years later. Also, these payments are not guaranteed they are subject to review. Who reviews it, what are the criteria? Sounds very subjective.


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61. answers     10/13/10 - 11:13 PM
Anonymous

Rabbi Horowitz asked questions that have not possible answers How do you create a group of 16000? what happened if you have 400 members, 3,500, 7,000? you are just on the way creating a group, if you have a group has 16,000 ppls, let's say that 6,000 are sponsors, so 10,000 are going to die, let say in 100 years (if you start in the program at 20) that makes that 100 ppl are going to die for year! If each member has average 3 kids, we need 300 times $100,000 ayear, that is 30 MILLION dollars a year!

thiis is NOT a question, it is something that HAS NO possible Answer

I do not like that "the money stays in accounts" they get only interest, please, if it is their money, they should get their money and choose how to manage it!

On the positive side: if there is an account accesible view to everyone, to see how much money is being collected, how much money (and well deserved) the administrator takes, even @ 50% !!!) and we see that ppl get this money (not the invisible rabbis )I would be encouraging ppl to support this program, ppl gives tzedakka , fundraiser keeps, 50%, and money go to help yesoimim, it is great!!!!!!!


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62. Why not subsidize term life policies?     10/14/10 - 11:31 PM
Yoel B

It seems to me that Lloyd is on the right track: A gemach that subsidizes all or part of the payments for term life policies for those who can't afford it. Might even be able to get group rates. Couple it with an educational program focusing on yeshiva faculty and students -- and another for girls' schools and seminaries.

As it stands, it sounds like a slow motion catastrophe.


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63. Why is Areivim life insurance back unchanged?     10/15/10 - 10:09 AM
Concerned on Behalf of the Klall

I noticed that after Rabbi Horowitz began his research earlier in the summer, that although no definitive psak came out of it, the massive advertising for the Areivim life insurance program, in both the print media and home mailings, seemed to have disappeared. This led me to believe that the managers of the program pulled the program, when it was shown to be unsustainable by the actuaries and legal professionals who investigated it.

However, I noticed that advertising for the Areivim life insurance program reappeared in the Yom Tov additions of the Chareidi papers (Yated Ne'eman and Hamodia). Although I personally did not receive any media mail directly from them, I don't know if others did or not.

Their new advertising campaign does not indicate any substantive changes in the way the program is run. Why have they decided it's okay to come back? Are they hoping that the negative publicity surrounding their program will have died down, and people will have forgotten the serious legal and ethical questions which were raised earlier in the year?

I appreciate the fact that Rabbi Horowitz raised this issue (we're talking about the potential of millions of dollars being raised for a highly questionable and potentially illegal program, that could be used instead to purchase term insurance from reputable companies, to protect the families of those who cannot afford to purchase insurance on their own).

At this time, I think we would all appreciate the input of the American Gedolei Yisroel to take a look at the facts, as presented by professionals in the field, and rule on this quasi Tzedakah organization once and for all. And if there are ways of making the program work - then they should insist that those corrections be made, before they continue to market it.

Rabbi Horowitz -- will you present this question to the Moetzes Gedolei Hatorah on behalf of the concerned Klall?


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64. Great Program     5/27/14 - 2:22 PM
Jacob Maslow - Staten Island - jmaslow1@gmail.com

Ideally, everyone should have a term life policy. Arevim doesnt argue with that. This is not a life insurance ppilicy. It provides charity to its members and something to live on. Social Security is inadequate to live on but does provide a basic benefit and many rely on it.

The realities are that many do not have insurance and people rely on the areivim program. They prefer it be used to pay for major expenses like a wedding or bar mitzvah as that is nearly impossible for a widow to pay for. The family and the local rabbi has discretion to use some or all of it for current expenses if needed.

I signed up for this program (areivim.info)and pay when someone passes away. It gives them a little more breathing room. My neighbor passed away. His widow doesn't work and they have 4 kids aged 5-13. They didn't have this policy.

The questions about the math have been answered (the on i use collects $7 per child is raised from each member of the group as well as $7 for the mother - not sure if all plans do that.) Also the funds raised for the mother is intended for regular living expenses and reduces the pressure on the longer term fund.

As far as who is in charge, that can change over time but the main board members and executives are filed with the IRS. It is viewable at guidestar.org. All charities (with the exception of shuls and yeshivos as they are completely religious based) must file for 990.

I have been contributing a long time. Most months there are no funds raised.


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65. Great program     6/30/14 - 11:15 AM
Shmuel

It's all a matter of trust. The rabbis that established this program created a life insurance plan that has a very low cost and excellent benefits. The way the program is run is entirely up to the discretion of the rabbis who run it.

If you trust the rabbis who signed the letter of approbation supporting the program, join it. If you don't, don't join it. That's the bottom line. I trusted the rabbis that I saw signed on the letter of approbation, so I joined.


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66. Tizke Lemitzvot to Areivim     11/27/14 - 2:09 PM
It all Good - Brooklyn, NY

I am surprised at all of these negative comments. What will all of you do when your poor neighbors c'v passes away with 8 kids. Are you going to run to their rescue? Is your community going to put them through school, buy them clothes and marry them off? How many drives are going to need to be done to accomplish this? I can not imagine that any community will come up with $800,000 for this family in need. The father couldn't afford life insurance, but he could have afforded the $100 or $200 per year that he would have "donated" with areivim each year. It is working for a few years now and is a big benefit to our communities.

The Rabbi clearly said "If you can afford life insurance, then go buy life insurance first. This is only for those that can not" Is it 100% fool proof? No. It is obvious. He also made that clear when he said in the event of a catastrophe, they would check with their Rav. There could be many solutions at that time - but if not and it was c'v to shut down, then you lost nothing. How did you lose nothing? Because your donations over the previous years were to orphans and widows. Donating to orphans and widows is a mitzvah right? And if you could have afforded to buy insurance and of course listened, then you have life insurance coverage, then you still have coverage. And if you couldn't afford to buy insurance, then you had nothing coming to you anyway before Areivim existed.

So in the end, everybody is better off with an organization like this in existence. Just sit down and say "Thank You Hashem for such a vehicle in our communities for those that can't afford it and thank your Rabbis for taking your precious time to organize and manage it."


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67. Areivim member     3/2/17 - 11:56 AM
Bruchie - Lakewood

I am an Areivim member. My husband has life insurance. I do not. I signed up for Areivim so that if anything happens to me then my family will be protected. My husband's life insurance is for a higher sum of money than Areivim would have given in the event of his early death C"V. I couldn't afford to buy a policy for me so Areivim was the next best option. Over the years of being a member there were definately less than 10 deaths a year and I paid little into the program. The money I paid in is worth every penny as supporting orphans anonymously is what I prefer.

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