Analysis

Israel's Funding of Life Insurance for Yeshiva Students Raises a Serious Moral Dilemma

The government will soon grant full-time yeshiva students who are married, publicly funded life insurance. Paradoxically the most significant disagreement comes from within ultra-Orthodox community itself

Yeshiva students studying in Jerusalem, 2012.
Olivier Fitoussi

The distorted economy among Israel’s ultra-Orthodox community leads to distorted solutions, or at the very least those that raise serious moral dilemmas. This is the case for the recent benefit that the state will be granting married, full-time yeshiva students (avrechim) after a decade of arguments within both the government and the ultra-Orthodox community itself – publicly-funded life insurance.

The new life insurance is intended to address a social goal: to fund the massive families of the avrechim – ultra-Orthodox families have on average seven children – should the father die. According to Deputy Finance Minister Yitzhak Cohen (Shas), the politician responsible for the life insurance initiative, currently families in this situation are forced to live off donations and community charity funds known as gemachim. Now these families will receive, on top of their monthly National Insurance Institute payments, life insurance payments of 2,000 shekels $563) a month for 15 years – or 360,000 shekels in total. Thus, these families won’t be a burden on the state but instead will be funded by private insurance companies.

In theory this is an obvious social goal. Yet the new insurance – set to take effect in January – has caused controversy. Paradoxically the most significant dispute, which delayed the policy change for close to a decade, comes from within ultra-Orthodox society itself. A sharp opponent is Knesset Finance Committee chairman Moshe Gafni (United Torah Judaism), apparently because it will push Haredi society toward a culture of saving and insurance, as opposed to its current reliance on community gemachim, and also because the state financing is slated to come from the current yeshiva budget, which currently totals 1.2 billion shekels a year. The Finance Ministry is refusing to allocate additional funding to finance the insurance.

Former Education Minister Naftali Bennett approved the insurance program in May, days before Prime Minister Benjamin Netanyahu fired him. According to the plan, starting in January heads of kollels (yeshivas for married men) will be responsible for buying life insurance for their students. The state will be redirecting a small portion of its annual yeshiva budget – 155 shekels per student, or a total of 10-20 million shekels a year – to fund this. In addition, each yeshiva student will be responsible for paying a small sum, likely about half of the cost of the premium.

It is believed that the yeshivas will be able to buy insurance at a good price, among other reasons because the total value of the insurance is low – no more than 360,000 shekels per individual – and because this is a large, young, healthy population group. Israel has some 70,000 married, full-time yeshiva students, who have an estimated 500,000 children in total.

And yet, this is a group of men that has chosen not to work to finance their families, and their contribution to their families’ finances amount to the meager stipend they receive from their kollels – 774 shekels a month from the state, plus an unknown sum that the kollel itself scrounges up, generally thought to total about 2,000 shekels a month. Generally the wife is the one working while the father makes do with picking up the children after preschool.

Many people within the education and finance ministries consider the new insurance policy to be a great achievement for the state. Without investing any additional money, it is reducing a significant social burden – the cost of caring for a widow plus seven children, while teaching the ultra-Orthodox community to save for the future. “This is an extension of the mandatory pension policy,” stated someone from within the government, “of making sure that the weakest population is insured with a pension, against disability and in the case of death.”

But opponents counter that this policy is unfair and deepens inequality within Israel. Primarily, married, secular college students with children are not eligible to receive 155 shekels from the state to buy life insurance. Furthermore, the state policy of mandatory pensions, which includes life insurance, is intended to help weaker workers who struggle to finance their families. Avrechim don’t work, don’t finance their families and therefore don’t save for their pensions. You could consider the mandatory pension a benefit reserved only for those who work. But now the state has reversed that, and now avrechim who don’t work can also ensure the future of their families at a particularly reduced cost, with a 50% state subsidy.

“What do you want,” asks MK Cohen rhetorically, “to see a widow with eight children living on handouts? Is that what will make secular people feel good? We’re talking about 2,000 shekels a month – a tiny sum that a family this size can’t really live on.” He’s right, of course, and of course widows and orphans cannot be thrown into the street. But it’s also right to say that it’s ultra-Orthodox society that’s responsible for the distortion for letting families with seven children be financed by only one working parent, the mother – and that this is the problem. If both parents were working, they would have a mandatory pension policy, including a life insurance component. Since so many ultra-Orthodox men don’t work, the state has to cook up solutions and encourage them to buy life insurance through the use of public funds.

Ultimately, this is public money being used to ensure the future of ultra-Orthodox children, without contribution from the fathers. Prof. Momi Dahan of Hebrew University notes that Israel’s welfare state is one of the stingiest in the West. One of the main reasons for this is the public’s feeling that the ultra-Orthodox violate the unspoken social convention of helping those who try to help themselves. The poverty of the ultra-Orthodox, who choose not to work, repeatedly pushes Israel’s social services into unspeakable moral dilemmas.