Verhovayak Lapja, 1944 (27. évfolyam, 1-52. szám)
1944 / Verhovay Journal
Page 4 Verhovay Journal May 11, 1944 Verhovay Journal Journal of the Verhovay Fraternal Insurance Ass’n OFFICE OF PUBLICATION 8502 West Jefferson Ave Detroit, Michigan PUBLISHED SEMY MONTHLY BY THE Verhovay Fraternal Insurance Association Managing Editor: JOHN BENCZE Editor: COLOMAN REVESZ Editor’s Offic« ' 345 FOURTH AVENUE ROOM 805 PITTSBURGH, PA. All articles and changes of address should be sent to the VERHOVAY FRATERNAL INSURANCE ASSOCIATION SUBSCRIPTION RATES: 345 FOURTH AVENUE PITTSBURGH, PA. United States and Canada #1.00 a yea1 Foreign Countries $1.50 a yea, ADVERTISING DEPARTMENT: P. O BOX 7. WOOLSEY STATION — LONG ISLAND CITY, N. Y. Entered as Second Class Matter at the Post Office at Detroit. Michigan, under the Act of March 3. 1879. GOING STRONG With the beginning of this year the Verhovay Fraternal Insurance Association has become a six million dollar organization. The assets of our Association have increased one million dollars in 28 months, since October, 1941. At present, we are well on the way towards the seventh million. The members of our organization appreciate the Association first of all because of its fraternal activities. Nevertheless, we all realize, that the existence and the further development of our fraternal activities depend on the soundness of the financial structure of the Verhovay, and, for that reason, we find cause to rejoice over having attained this stage in the development of our association. Let us look hack at this time and see how this organization has developed in the last few years. It was about 8 years ago that our assets amounted to four million dollars. Since that time our assets were increased from year to year by the following amounts: In 1938 $285,121.07 In 1939 $261,360.74 In 1940 $378,527.50 In 1941 $418,536.33 In 1942 $376,310.88 In 1943 $506,575.79. Last year was the first in the history of our Association in which our assets increased bymore than a half million dollars. The assets of some organiza tions increase without a proportionate increase in the membership. in such case the increase is the result of a successful policy in investing the funds of the organization, and the prevalence of a low death rate among the membership. Under such circumstances the increase is only a passing symptom which in due time will be followed by a disappointing let down. Where there is no substan tial increase in the membership, a decrease will follow due to the growing number of deaths among the older members which finally results in the shrinking ot the assets, also. On the other hand, there are organizations in which the number of members increase while the assets remain stagnant. That symptom is due to an illadvised investment policy as well as to a high death rate among the older members. The increase in the assets of an insurance organization must be in proportion to the increase in membership. The Verhovay is going strong in this respect also. In the same period of time that the assets increased by one million dollars, the number of members increased by 4,000, which is the equivalent of a net increase of 143 members per month. The total increase of the assets of the Verhovay in the last 28 months was 20%, while the membership increased by 11%. The growth in the assets of the Association kept ahead of the increase in the membership in an ideal proportion. We will more appreciate this development if we keep in mind that such growth occured in a time when the investment market yielded unusually low returns and the number of prospective young members decreased due to the fact that most of our young men entered military service. Remember we are talking about the last 28 months, out of which 26 were war-months! Credit is due to those responsible for the investing of the funds of the Association as well as to those who were responsible for the growth in our membership. The fact that our Association is going strong should fill all of us with satisfaction and pride. At the same time it should give a new momentum to the great work of soliciting new members: the Verhovay is going strong and those who will join us, will be going strong with us! How Much Are You Worth Persistency and perseverance reach the goal. Regular payments, even small they be, restore a policy to its full loan value. We are not talking now about human values that are very hard to express in financial terms. But in addition to the variable human values, each individual also has a cash value which is determined by a number of factors. The earning capacity of a man, or a woman, is one determinator of his or her cash value. Obviously a man who makes $5,000 annually, has a higher cash value than another who makes only $2,500 per annum. Another factor in the determination of the cash value of a man is the size of his family which of course should be considered a liability. A man’s health, his age, his social standing, the size and style of his home, the fact of whether or not his home is paid for, and ' many other elements are to be considered in the determination of one’s cash value. The value of any possession usually finds expression in the amount of insurance that is placed on it. The owner of a home will insure his home for the value it represents. No one would be satisfied with carrying $2,000 insurance on a house which has a market value of $10,000. On the other hand, one cannot overinsure his property: it is impossible to carry 5,000 dollars insurance on a car that is worth only $500. Buildings, homes, garages, machinery, automobiles and furniture are generally insured for the amount that corresponds to their market value. It is, therefore, surprising that the most valuable possession of all, human life, is in most instances not insured for the amount which would represent its fair value. . Nine out of ten prospects, when taking out of additional insurance is suggested to them, will answer: “Oh, I have plenty of insurance.’’ Upon inquiry it will be found out (hat such “plenty” is usually re presented by two, three, or, at most, four thousand dollars worth of life-insurance. Now let us ask the question: is four thousand dollars the fair value of a man’s life? If a house burns down the insurance company will replace the loss: the money received through fire-insurance will cover the loss. It will not cover the sentimental loss caused by the burning down of a home one has become attached to, but it will cover the financial loss. Will upon the death of a man, the insurance policies in his possession cover the financial loss caused by his ecease? Again we emphasize that there is no possibility of covering the sentimental loss which is determined by human values only. But insurance represents the one and only possibility for recovering the financial loss caused by the death of the head of a family. How much is a man, or a woian, worth—financially? What loss will be caused if he drops out of the line of the living? If a house is supposed to be insured to the amount of the value it represents, if furniture, machinery, automobiles are supposed to be insured for the value they represent, then, by all means, human life should also be insured for the value it has for those depending on it. Obviously, neither three nor four thousand dollars will cover the loss caused by the death of the head of a family. Every -widow, left behind with a child or two, will tell you that. Even UNCLE SAM tells you that. The fact that Uncle Sam is willing to insure every soldier to the tune of $10,000 should be a lesson for those men who believe that 3—4000 dollars represents “plenty” of insurance. The Government of the United States, which has all the statistics, figures and experts at its disposal, finds that ten thousand dollars worth of insurance represents the fair value of a human life, even if there are no persons depending on it particularly. Let us see if we can arrive at some satisfactory conclusion as to the value of a head of a family. Supposing he earns but $2,500 t mually, and deducting the amount which would be needed for his own upkeep which may fairly be figured at 30% of his earnings, the value of his net earnings may be put at around $1750 per annum. If living, he would have to work for almost 6 years to earn the net amount of $10,000 for his family. Even if he is insured for $10,000, that insurance would only replace the loss of six years’ net earnings, but even that much insurance would not cover the loss beyond that period of time. Ten thousand dollars of insurance is considered pretty high coverage for a man with a low income, yet even such high coverage would obligate those left behind to find ways and means to be able to stand on their own feet within six years after his death. This is possible under favorable circumstances, if the children are about 12 years old at the age of the father’s death, and the widow en£ >ys good health and has the ability to look after herself. However, if -the children are young and the mother frail, then the early death of the father places the family into an impossible situation which will sooner or later necessitate public support for them, and no man can say that he has provided for his family if it has to fall back upon public support. Now let us consider the question from another angle. Statisticians have figured it out that the expense involved in bringing up one child in a family with an average annual income of $2500, from its birth to its 18th birthday, amounts to about $6500, The child's part of the home, furniture, medicines, clothes, food and other expenses are represented in this total. Note, that higher education has not been figured into this amount. If a father dies at the time his child is born, that child represents a liability of $6500 which ought to be covered by additional life insurance. Two children will cost a father about $13,000 from birth to their 18th birthday, not counting higher elucation which follows after that age, but which is generally discounted as a possibility in the lower income brackets. If a father dies, leaving behind him a son, age 3, and a daughter, age 5, then he leaves his wife a liability of $10,000 represented by his two children. There are other liabilities too, that have to be taken care of in advance. Suppose the man bought a home, after his children were born, and he has a mortgage on it which still amounts to $4,000 at the time of his death. In that case his liabilities total $14,000 plus ... at least $1,000 “the first thousand dollars”, we call it— because they do not belong to the family but to the doctor, the hospital, the undertaker and the cemetery. Thus a man with two small children and a mortgaged home, Who carries $4,000 insurance, is definitely under-insured because i .e amount of his insurance covers only 26% of his liabilities, and no provisions are made at all for the widow either who immediately, will have to look out for herself in addition to taking care of the uncovered balance of her husband’s liabilities. It is easy to see that even Uncle Sam does not overestimate the cash value of a man’s life when placing it at $10,000. It is a very moderate amount in proportion to the financial loss caused by his death. The question is, can a man with, an annual income of $2500 carry $10,000 worth of insurance? It will surprise many if we answer; in the affirmative. Insurance; should be taken out at an early j age and the building up of an j insurance estate should begin not; later than at the age of 25, evenj if, at that time, there are no de-j pendents in sight. But at the age I of thirty every man should have; made up his mind as to the estab-] lishment of his insurance estate, j And at that age $10,000 worth otj insurance will cost but $204.40: per annum, or $17-90 per month! at our rates. Anyone with a monthly income of $200.00 should provide for his family by laying aside 9% of his income. j Naturally, almost everyone will buy his insurance from several; companies and associations ... Th» point is that no one should feel j the need for being apologetic when approaching a prospect tor additional insurance, if that prospect claims having “plenty ot insurance’’, which, however, upoqi closer inspection, turns out to re» present only 10—20 or 30% of hit liabilities. | 19, Wins $1000 Bond FirstfYear in Plant DETROIT—LaVona Sible, 1 aircraft spark plug inspector af the Ionia (Mich.) plant of AG Spark Plug Division, General Mo^ tors, won a top $1000 war bond! award for her suggestion reducing inspection time and increasing quality—less than a year aftei she started work. Her suggestion was one of the 125,000 submitted in 1943 by GM employes, resulting in the payment by Genera] Motors of nearly a million dollars in war bonds and stamps. • Miss Sible always has lived on a farm and her normal interests are 4-H Club work, particularly in cattle and sewing. But she is extremely enthusiastic about her job in a war plant—her fiance is with the Fifth Army Tank Bati talion in Italy.
