Verhovayak Lapja, 1945 (28. évfolyam, 1-52. szám)
1945 / Verhovay Journal
Page 8 Verhovay Journal January 10, 1945 THE NEW RATES OF THE VERHOVAY Analysis of the new Rate-Book continued. THE TEMPORARY RATE-BOOK I As was expected, letters arc : pouring in to the Home Office, i containing numerous complaints because of the incompleteness of i the Rate-Book and questions to which there are no answers provided in that little booklet which j has been sent to the Branch- j Managers at the end of the year, j Anticipating these complaints and questions, we prepared the article, “Introducing the New Rate- Book," which appeared in the last hiue of the Journal. Apparently, many of the managers received the Journal after the first oí the year and, therefore, asked questions which already have been answered in that article. The introducing of new rates is a highly important matter 2f»d, therefore, it is necessary to deal with it in detail. Trying to avoid repetition as much as possible, we w ill attempt to furnish full information concerning the various problems that arise in connection with this change. Nevertheless, it seems to be necessary to repeat a few statements made in the last issue. Please note that the New Rate- Book is intended to serve only temporariiy. tVar-time conditions have made it impossible to complete the book as planned, in time. You may easily see what the Home Office was up against when the actuary of the Association was inducted before he could complete the table of rates. The present actuary of the Association had to go over the entire works, and then continue where the former one left off, with the computation of the rates and the various non-forfeiture values. It isn’t easy to change horses midstream—the Democrats convinced the American people of that—and it wasn’t an easy job for the new actuary, Mr. Knödel, to take over, in the middle of the year, where ME. Bassler had left off, following the call to the colors. This is just one of the handicaps the Association had to overcome in the ' course of the preparation of the tables. While an outsider maj feel that the publication of the rates was delayed too long, we KNOW that it was almost a miracle to be able to do as much as has been done. This is one of the instances when blatne falls upon those who deserve credit for having completed a job in the face of discouraging difficulties. It is our pleasure to report that the Table of Rates has now been completed. The attention of the managers was called to the fact that the new' book contains only the rales up to the age of 55. The rates for the ages of 5G to 60 arc now ready and they are published in this article for the most popular classes of insurance, for your convenience. The preparation of the Table of Values—so necessary to our ales force—is nearing completion. But a thorough comparison of the new values with the old •mes will be nude in the course f this article so as to enable the lanagers and organizers of our | \ssoriation to furnish information Í o their prospects as to the non- ' forfeiture values, even before they can be supplied with the complete bask, containing the full tables of rates and non-forfeiture values. However, before going into these details, one important point should be brought out clearly. VERHOVAY CAN STILL MEET COMPETITION Many of our managers are worried that the increased rates of the Verhovay will lessen the appeal of our membership certificates. Some THINK that our rates are now equal to or, in some instances, even higher than those of other organizations, and, as a result, prospects will prefer the policies of nationally known insurance companies to the certificates of the Verhovay. Of course there is much more to the evaluating of various insurance policies than the simple comparing of rates. The advantage of lower dues is often offset by the disadvantage of correspondingly lower non-forfeiture values and other provisions which taken together lead to the proper estimation of a policy’s cost- Nevertheless, in most instances, even our increased rates compare favorably with those of other organizations. To take one instance: the rate of the class '“B”, Twenty Payment Life certificate, at the age of 25 is §3.53 less per annum at the Verhovay than at one of the world’s largest and most popular insurance companies. The same is the case with other classes at various ages. How come, then, that some claim to be able to purchase a life insurance policy of some class or other for less from some insurance company? There are various answers to this question. We admit that there are cases when a prospect may get an insurance policy on lower rates from an insurance company than from the Verhovay. Quite a number of insurance companies sell, what is known as “PREFERRED" insurance policies to so-called “preferred” risks. These insurance companies “rate” their prospects according to their professions and other factors pertaining to their life-expectancy. The Verhovay, how'ever, treats all of its members equally as a matter of principle. The physician pays the same dues as the miner. This may be all wrong from an insurance business viewpoint, but it is the only way in which we can remain consistent to the FRATERNAL PRINCIPLES which bind us. The majority of our members consists of such people w'ho would not be entitled to preferred rating with an insurance company. If the proper rating is applied to them —the rates of the Verhovay will compare favorably with those of other organizations. That does not mean, however, that our organizers should “lay off” the professional people. It must be emphasized constantly that we offer more than insurance protection only. Not speaking of the 90 day grace period which compares favorably with the usual 30 days’ grace of the commercial insurance organizations— and that, too, carries much weight with prospects who want to make sure that they will be able to keep their certificates in force even during emergencies—and not speaking of the various provisions which increase the appeal I of cur certificates (like the liber- ( al provisions for re-instatemenE7 the cash and loan and paid-up and extended values of our certificates), it should always be remembered and mentioned that a new member of the Verhovay enters a fraternal order which ! is prepared to extend to him and to his family many benefits other than life-insurance protection. It pays a prospect who would be entitled to preferred rating with an insurance company, to join the Verhovay on somewhat higher | rates, because the Verhovay brotherhood entitles him to benefits which no insurance company can provide for him. That this argument is a sound one, is amply proven by the many professional men and women who have joined our ranks and who always profess their pride of being members of the Verhovay F. I. Association. AH this, cf course, pertains to prospects only who would be entitled to ‘'preferred” rating for which ihe Verhovay has no provisions. In all other classes our rates are lower Naturally another aspect of the mater should be kept in mind by the alert organizer. With commercial insurance organizations a careful distinction must be made between “participating” and “non participating” companies. The rates of a participating policy are invariably higher than those of j a non-participating policy. Now the Verhovay certificates are wliat we call “participating” certificates, since the Verhovay declares and pays dividends. It has done so in the past, and this year is no excepi ion even though the dividends are held in a special emergency fund from which they will be paid out after the war,N if and when conditions permit. We have every reason to assume that the Verhovay will continue to pay dividends, in fact, due to the increase in the rates and THE CORRESPONDING INCREASE IN THE RESERVES OF THE NEW CERTIFICATES, we may expect that the dividends will also increase in the future, unless unforeseen conditions change the present situation completely. (Such change, however, would affect all other insurance organizations in the same manner.) It follows that a non-participating company MAY offer policies on lower rates in some instances but, obviously, those rates actual’y are not lower since the future dividends will substantially decrease the cost of a Verhovay certificate, as in these cases the NET COST of a Verhovay certificate will be LESS than the cost of a non-participating policy. Taking EVERYTHING into consideration, not only the rates, we can safely say that the Verhovay still offers the most for the least. Of course, there always will be prospects who can’t see beyond the price-tag. When buying an overcoat, you will look not only at the price-tag, but also at the make, the material, the style etc., of the coat, there- | by determining whether that coat; is reasonably priced or not. A S50.00 coat may be much more expensive than a hundred dollar coat. It depends on how much service you get out of it. Some people will always buy the lower priced but more expensive coat because they see nothing but the price-tag. We all agree that they don’t know how to buy. But it is the same with life-insurance. It is not enough to look at the price-tag. If you want to know exactly how much an insurance policy is worth, you must look at the name of the company, you must secure information as to its- standing, its solvency-ratio, (remember the Verhovay is an Association w’ith one of the highest solvency ratios in the country!), you must study the provisions contained in the policy, the non-forfeiture values, the service rendered by the company, and if you compare all that , with what the Verhovay offers . . . brother, you have a sale on your hands! NON FORFEITURE VALUES We have referred several times to the non-forfeiture values the tables of which have not been printed yet. It was indicated last week that these values increase due to the increase effected in the rates. In the following an example is given of how the new values compare with the old ones. CLASS “A”, WHOLE LIFE. $1.000.—, age of entry 30. Full reserve after 10 years $101.— according to the old Tabic, $110.— according to the ncW Table, an increase of $9.00. ■ Paid-up insurance after 10 years $223.— according to the old Table, $241,— according to the new Table, an increase of $18.—. Extended value: 10 years and 5 months according to the old Table, 12 years and 3 months according to the new Table, an increase of nearly 2 years! It was pointed out in the last issue of the Journal that the increase of the rates in Class '‘A’’ amounts to not more than 7 and not less than 4 cents in the various age-groups. The rates in Class “B” have been increased from 24 to 27 cents and in Class “C” from 11 to 18 cents. A greater increase in the dues results in a correspondingly greater increase in the nonforfeiture values. Consequently, these values increase most in those classes the rates of w'hich have suffered the greatest change. THE SUBSTANTIALLY INCREASED NON - FORFEITURE VALUES WILL PROVE A GREAT ATTRACTION AND AN EXCELLENT SELLING-POINT. THE MISSING TABLES The Rate Book now in the hands of our managers and organizers does not contain the rates for the ages 56 to 60. In these age-groups there are three classes that can be considered popular, the rates of which are printed herewith for your convenience. CLASS “A” WHOLE LIFE CERTIFICATE $1,000.— Age Monthly Annual 56 $4.58 $52.89 57 4.80 55.42 58.______________ 5.04 58.13 59 5.29 61.03 60 ______________ 5 56 64.12 CLASS “B” 20 PAYMENT LIFE CERTIFICATE $1,000 Age Monthly Annual 56 _ $5.06 $58.37 57 5.24 60.52 58 5.44 62.83 59 5.66 65.32 60 5.89 68.01 CLASS “C” 20 YEAR ENDOWMENT CERTIFICATE $1,000 Age Monthly Annual 56 ____________$531 §61.29 57 _ 5.47 63.10 58 5.64 65.09 59 5.83 67.28 60 _____________ 6.04 69.69 Comparing these tables with the old rate-book, we find that an increase in Class “A” is even less than we anticipated as it amounts to 3 cents at age 56. and 1 cent at age 60. In Class “’B” the increase amounts to 20 cents at age 56 and to 18 cents at age 60. In Class “C” the increase is 5 cents at the age 56 and 2 cents at the age of 60. DON’T BE APOLOGETIC! There is no reason in the world why the organizer should apologize for the increase in the Verhovay rates. All the other insurance organizations and companies have done so years ago, and we only follow suit under the pressure of economic conditions. But it should always be kept in mind that life-insurance still remains the best and safest investment, And the fact that the dues have been raised should only serve lo strengthen the confidence of the pdbiic in our Association, for it is understood that the increase effected with the 1st of the year will help serve to strengthen the financial structure of the Association thereby insuring it agains^ economical reverses in the fature. Now every sensible person who thinks of getting life-insurance, wants to find an organization the stability of whch is assured beyond question. Some organization may still insist on remaining on a 4 per cent basis even though it is downright impossible to attain such high returns ou sound investments. Such an organization may compete with conservative institutions by somewhat lower dues but it must be remembered that the financial soundness of an organization is just as important as its rates. Life-insurance is a long-term proposition. The prospect wants to be sure that the organization which he joins will be solvent 20-30 or 50 years from now. One would prefer the somewhat higher rates of a perfectly dependable organization to the lower rates of an institution the future outlook of which cannot be judged with optimism. The ratio of the assets of an organization to its liabilities may be 99 or 101 per cent—as it is with some institutions—or higher than 120 per cent, as is the case with the Verhovay: wc leave it to your own judgment to decide which is to be preferred. In this respect the raise in the dues of the Verhovay is nothing else but a step towards even greater stability than the Verhovay prided itself of in the past. Properly explained this step should help strengthen the confidence of the insurance-conscious public in the Verhovay, and, thereby, result in greater increase in the number of members a.'so. /------------v------------—• And you call yourself a peace-loving man? —• I do, your Honor. — Even after you slugged Charles on the jaw? — Yes, your Honor. I never saw Charles so peaceful as just after I hit him.
