BU May Raise Money With Life Insurance

Boston University (BU) may seek to increase the size of its endowment by taking out life insurance on its students and collecting the benefits when they die, president John R. Silber announced in a speech last week.

Although BU has not yet decided to adopt the plan, the school's vice president of public affairs, Thomas D. Cashman, said he thought it would be a great way to generate money.

"It is an opportunity for a student to give a very significant gift to the university after they die," Cashman said.

Under the proposal, the university would ask alumni to purchase insurance policies on student volunteers and sign over the benefits to the university, Cashman said.

"Their gift will have a much bigger impact 50 to 60 years down the line than it would have now," he added.

Students who attended the speech said yesterday that they initially found the idea dificult to accept.

"It's hard to tell people our age we're going to die," said junior Robin A. Gonzalez.

"Initially, I felt that it was a little bizarre. The main problem with this is that people find it morbid that the university is investing in the student's death," said freshperson Matthew G. Mercurio. But, he added, "What you have to realize is that this is what insurance companies do everyday."

"It functions right along the lines of an insurance company," Cashman said. "The morbidity angle is essentially a ludicrous charge."

In his speech, Silber said the money collected by the insurance policies could be donated for whatever use student volunteers desired, Gonzalez said.

"It's like willing money to the university, and if you look at it in this light it's not that bad. If I died tomorrow, that money would enable another student to come here," Gonzalez added.

While Harvard has also been approached by insurance companies suggesting similar plans, it has turned them down, said Director of Planned Giving Charles W. Collier.

"We won't consider any plans like this for economic and public relations reasons," Collier said. "I'm skeptical of the benefits and quite concerned with the message it conveys," he added.