X-Message-Number: 10963
Date: Wed, 23 Dec 1998 14:23:04 -0500
From: Crevier <>
Subject: life insurance.

Last sunday I posted my concerns about a basic contradiction in the
arrange-
ments of those of us who plan to finance their suspensions through 
life insurance: we are counting on the payment of a "death benefit" to
help 
us stay "alive". It works now because cryonicists don't have the same 
definition of death as most people (including insurance administrators)
do.
There may come a time, however, when the general public wisens up to the
fact
that suspended patients are not really "dead," and we may then find it 
difficult to cash in on our policies.

Brian Wowk (in a private E-mail), Tom Donaldson and Jim Yount commented
on 
my views, indicating that there was no cause for alarm.  

I agree with Tom  that everything may eventually get sorted out, and
that
insurance companies may offer policies that explicitly provide for
cryonic
suspension. There might however be a transition period, lasting perhaps
several years, during which the applicability of life insurance to
cryonics
will be uncertain.

The gist of Brian and Jim's message was that insurance companies
wouldn't
really have a financial incentive to refuse payment. This may be true
for 
some kinds of policies, but there are others for which withholding
payment 
would be quite advantageous to the company. Consider the case of a pure
term 
insurance, without any cash value: the entire insured amount would then
remain
in the company's account. Since the suspended beneficiary would
presumably 
stop paying his or hers annual dues, insurance coverage would stop, and
the 
company could hang on to the money forever. 

Now consider a whole life policy with some cash value: there is an
initially
insured amount of say $75,000, plus and equivalent accumulated capital,
for a 
total of $150,000. Most of the interest on the accumulated capital is
used to 
pay off the annual dues (which is why the beneficiary can stop paying
after 
accumulating a sufficient capital), and very  little interest remains to
make 
the capital grow. By withholding payement, the insurance company can
manage to 
keep the $150,000 and most of the interest on it for as long as the
patient is 
not revived (at which point the $75,000 capital plus any accumulated
anemic 
interest will be payable), or the patient is declared truly dead  after
an 
unsuccessful revival attempt, at which point the whole $150,000 plus
accumulated 
small interest will be payable. Note however that  either of these
events is 
probably decades away, during which time the company can keep skimming
off 
most of the interests, which will probably compensate it for the payoff
many 
times over. Note also that the company suffers no actuarial costs
applicable 
to the annual dues: after all, the likelihood that the beneficiary will
suffer 
a heart attack in the dewar if pretty slim!

All right, so in some cases at least it is worth the company's while to 
withhold payment. Can they legally get away with it? Jim offers a
thoughtful 
argument against it, giving the example of  an insurance contract signed
in 
1998: "The contract of insurance was based upon 1998 mortality tables
and the 
definition of death in 1998. That contract was satisfied and cannot be
revisited."

My answer to this is a thought experiment. Consider the case of a man
who 
signed his insurance contract in 1950. In 1998, he suffers a heart
attack, 
stays three minutes without a heartbeat, but is eventually revived by
CPR. 
Can he collect his insurance money? After all, by 1950's standards, he
"died," 
didn't he? This wouldn't wash because a fundamental aspect of the
definition 
of death is the notion of permanence. Webster's Encyclopedic Dictionary
defines
"dead" as "in a state of complete and *permanent* (asteriscs mine)
cessation 
of vital functions." If the "death" of a cryonicist is not permanent,
then  he 
or she is not truly dead, in whatever year the contract was signed.  

So should we get worried? I wouldn't lose too much sleep on it. As Tom
pointed out, 
there are many ways out of this problem. We shouldn't however dismiss it
out of hand.

Daniel Crevier

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