Verhovayak Lapja, 1952 (35. évfolyam, 1-12. szám)

1952 / Verhovay Journal

“NIGHT IN OLD BUDAPEST"

January i6,1952______________________________Verhovay Journal

The Trenton Verhovay Branch 417 is presenting a “Night In Old Budapest” on Saturday night. January 26, in the Hungarian Home, Ge íesee and Hudson Streets.

The many months of hard work by the general committee shows very promising results. Keen interest has been aroused not only in Trenton, but in surrounding cities too for here is an opportunity for second generation Hungarians to see and enjoy the famous night life of “Old Budapest.” ,

The stage will be decorated with a mural of the Chain Bridge (Lánchid) and the Fishermen’s Bastion (Halászbástya); lilting strains of Gypsy music will fill the air from the Duna Palota; the hostesses will receive guests in real Hungarian Court dresses and famous artists, who have recently arrived from Budapest, will entertain.

Addmission for this gala occasion is only $1.25. Tickets may be obtained from members of the committee, The Trenton Field Office, 101 Genesee St.; New York Field Office, 205 East 85 St.; Philadelphia Branch Secretary Stephen Szemes; New Brunswick Secretaries Adam Simon and Michael Puskas.

Heading the various committees are: Mrs. William Miklovics, Chairman; Miss Claire Nagy, Hostesses; William Freund, Reception; William Miklovics, tickets; Mrs. Joseph Illés, Kitchen; Mrs. Robert Gibbs, Publicity and Mrs. Frank J. Cher, Program.

YOU CAN REDUCE THE COST OF YOUR LIFE INSURANCE

Annual Payments In Advance Produce Substantial Savings

Over the Years.

in considering our, life insurance dues, the thing to keep in mind first of all is that actually life insurance doesn’t “cost,” it has no “price.” It is wrong to approach a life insurance program with the question “what will it cost?” Life insurance is neither a perishable nor a depreciating commodity. It is an investment which has a definite face value from the outset and increases its current cash value year by year. One who pays his premiums to the end of the period set forth in his contract, will usually receive more, chan he invested which makes his investment a profitable one. But in addition to this feature, life insurance

also provides family protection. If

the insured member should die even after having- made only one annual premium payment, his beneficiaries will receive several hundred times

the amount he deposited in dues. The large difference between the

premium paid by the insured and the benefit received by his beneficiaries, represents the “protection” afforded by life insurance. This protection is “free,” it doesn’t “cost” "the insured a cent. In this, ordinary life insurance is entirely different from other types of insurance, like fire, automobile, hospitalization or sick benefit insurance. If the insured home doesn’t burn down, if the insured automobiléi is not wrecked, if the hospitalization or sick benefit insurance policyholderdoes not suffer illness, these types of insurance have no further value. The policyholder has no claim for the refund of any part of his premiums. His policies have no cash value. These types of insurance offer only ■protection. It is proper to think of

such protection in terms of “costs” and “prices.” But because life insurance is a profitable investment as well as protec.ion, it cannot be properly evaluated in terms of “costs” and “prices,” except in the higher age groups in which the greater mortality risk may require a premium total larger than the proceeds of the policy. If for instance a One Thousand Dollar Twenty Year Endowment contract is purchased by a 45 year old individual, the sum of the premiums to be paid during the 20 year period will be somewhat! larger than the face amount of the policy. This is because the mortality risk at age 45 is considerably higher than for instance at age 20. Mortality tables show that out of 100 individuals of age 45, some 32 will die before attaining the age of G5. In other words, if we have a hundred 45 year old applicants each for a $1,000 Twenty Year Endowment, .he fact that the full amount of 32 certificates will have to be paid out in the form of death benefits before (the end of the premium paying period will have to be taken into consideration. Funds must be made available to satisfy the claims hat will become payable before the completion of the 20 year premium paying period. Therefore, the rates for applicants at the age of 45 are computed so that each policyholder will be required to pay a rate hat over the 20 year period will total somewhat more than $1,000. What those’, policyholders who will be living at] the age of 65 are required t5 pay in excess of their then matured endowment, is the “cost” of the protection,, the “price” each of them will have

to pay to make sure that the full face amount of the policy will be paid to the beneficiaries if he should be one of those who die before completing their payments. This excess, however, amoun.s to only a few cents per month which makes this a very low-ccst protection even in the casei of the middle aged applicant.

The situation of the 20 year old applicants is far more favorable. Only half as many 20 year olds die within twenty years than of the 45 year olds. As a result, the compound interest earnings of the dues of the 20 year olds produce sufficient extra capital to pay the death claims after 'those in this group who die before the completion of the premium paying period. Therefore, the sum of the premiums to be paid during the -endowment period by the 20 year old individual will be less than the face amount of his* endowment certificate. Therefore, the “protection” in his case will be “free.”

PAYING BY THE MONTH

The greater part of our members pay their dues by the month. There is nothing wrong in that because, after all, there are many small wage-earners who may find it impossible to buy life insurance if they were required to pay their dues on the “per annum” basis. And that it one of the reasons why cur premiums are usually mentioned as “monthly dues.”

On the other hand, we should havea clear understanding of what the payment of our life insurance premium in monthly installments involves. It requires the branch maneger tc collect the dues not once, but twelve times each year. The dues remitted to the Home Office must be entered in the books, credited and processed not once, but twelve] times each year. In other words, each premium paid in monthly installments require twelve times as much administrative work as the

PAGE 11

annual premium. The cost of work, is wages. The wages can be paid; by no one else but by those who;

I require such work, in other words( by the members who' require the! Association to handle their premiums; n twelve monthly installments for!

j their own convenience. How much does this extra service cost?

INSTALLMENT PAYMENT COSTSLet’s take a 25 year old man who applies today for a One Thousand Dollar Twenty Payment Life Certificate. If he consistently pays a full r/ear’s dues each year throughout the premium payment period, he will have deposited a total of $643.80 by the end of the 20 years. Actually, a substantial part of this amount will be refunded to him in dividends beginning with the end of the second year, but since the dividends are the same whether the member pays by the month or by the year, this item may be omitted from our considerations for the sake of simplicity.

On the other hand, if he pays his dues on the “monthly” payment plan, he will have deposited a total of $683.60 by the end of the premium paying period, that is $39.80 more than he would have to deposit if he would make his payments on the annual payment plan. This $39.80 is the “cost” of the convenience of paying the life insurance premiums in monthly installments, rather than annually.

Considering that this amounts to something like 16! cents per month, it doesn’t look like much. Certainly, the extra work required cannot bei performed for less. But if we realize that over the 20 years of the premium payment period this difference will \add up to the equivalent of 14 monthly dues, then we must see that the “cost” is not quite so negligible, for the member will make the last 14 monthly payments of the 20 year premium payment period merely to pay the “price” of the convenience of having paid his premiums in monthly installments. This amount can be saved if the premiums are paid cn the annual plan.

The saving is even more substantial if larger premiums are involved. For instance, one who applies at the age of 45 for a One Thousand Dollar .Twenty Year Endowment for the purpose of complementing his old age pensions with the proceeds of his endowment policy, the difference between the sum of premiums paid on the annual plan and of the premiums paid on 'the monthly plan is $67.20, again (almost the equivalent of 14 monthly dues.

Finally, let us consider the 30 year old man who applies for a. $5,000 Thirty Year Endowment, also for the purpose of providing himself with an old-age income beginning at the age of 60. If he pays his, premiums on the monthly payment plan, he will pay over the 30-year period $282.90 more than the one who takes the annual payment plan. This example serves also to illustrate the savings that can be realized by a family unit in which each memof the family owns an insurancecontract. For example, in a family where there are 12 policies in effect, the head of the family probably pays one month’s dues each month on each policy because of the size of the entire premium load. Yet, there is a very practical way for such a family to save the cost of monthly -installment payments. The best procedure is to ‘stagger’ -'the premium payment dates, so ihat, a full year’s premium is paid on the first policy in January, on the second policy in February, and sd

(Continued on page 12)