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 Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=10963