Fraternity-Testvériség, 1993 (71. évfolyam, 1-4. szám)
1993-07-01 / 3. szám
Page 8 TESTVÉRISÉG THE ROLE of LIFE INSURANCE the 1980’s The climate for selling life insurance in the 1980’s was much different from what it is today. In the 1980’s, insurance companies turned their backs on life insurance as a means for protection, and started thinking of it primarily as a means for investment. During those years, all commercial agents and most agents working for fraternal societies realized most of their business from selling Universal Life as replacement for the traditional policies. When agents called friends and acquaintances, the question was: “Do you have a life insurance policy?” If the answer was, “Yes,” the next question was: “When did you purchase it?” If the policy was purchased a few years ago, the agent knew that he had a good chance of talking the policyholder into converting his existing policy into a Universal Life policy. The Universal Life policy that most life insurance companies offered seemed very attractive - it carried a much lower annual premium for the same face value than any other traditional life policy. The cash value in the new Universal Life policy grew at a much faster rate because the investment yield was over 9%. Therefore, it was easy to persuade a policyholder to convert his policy to a Universal Life plan. In the 1980’s, many insurance agents all across the country replaced not only the policies they had sold, but also those sold by other agents. The Federation was not immune from this conversion frenzy. Although we did not offer UL policies, numerous members of the Federation surrendered their policies and converted to UL of other insurance companies. In the process of conversion, a lot of people got hurt. Those individuals who purchased or converted their existing policies were misled by “pie in the sky” projections. In light of today’s economy, and the interest earned on invested premiums, Universal Life falls considerably short of what was considered the miraculous solution. In many cases, insurance companies, including some fratemals too, had to notify the policyholders that in order to keep their UL policies in force, they had to pay more premium. In the 1990’s, the life insurance industry is returning to its traditional business again, because insured and new clients are more interested in the return of principal rather than the return on principal (dividend). Public attention became tense when some of the big insurance companies started to collapse. Today people are more interested in the financial stability of the insurance company to whom they are about to entrust their money. Therefore, the financial strength of the Federation, just like that of any insurance company, is of paramount importance. George Dózsa, President Snivel/ Oí^ÍAÍ*ruxóy uv <JCui ixjpa/Ltp Group Departure December 20, 1993 from Newark, New Jersey and Returning January 3, 1994 J&k For All Your Travel Arrangements, Hotels, Tours and Cruises Call: MARGARET or NÁNDOR ERDEI Travel Consultants $ WE SPECIALIZE IN HUNGARY! CALL US FOR LOWEST AIRFARES TO BUDAPEST TRAVEL GUIDE, INC. 1085 RARITAN ROAD, CLARK, NEW JERSEY 07066 (908) 381-0260 OUTSIDE OF NEW JERSEY, TOLL FREE: 1-800-936-8687 Special discount on airfares to Budapest given to HRFA members. We look forward to the pleasure of serving you at all times. There is never a fee for our services.
