X-Message-Number: 9819
Date: Sat, 30 May 1998 23:37:03 -0400
From: "Stephen W. Bridge" <>
Subject: Alcor Suspension Fees

To CryoNet
From Steve Bridge, Chairman
Alcor Life Extension Foundation Board of Directors
May 30, 1998
 
Since it's the weekend and Alcor President Fred Chamberlain probably
won't see the CryoNet traffic for a couple of days, I'll try to answer
the Alcor policy questions.
 
Jim Yount, Bob Ettinger, and Charles Platt have covered well the questions
about why cryonics companies cannot *guarantee* that they will never raise
their minimums.  I will add some Alcor notes.
 
--  Like the others, our contract states that we cannot guarantee that the
suspension minimums will never be raised.  I should point out to newer
CryoNet readers that "suspension minimums" are the levels of minimally
acceptable funding that each organization will accept for each available
procedure.  For instance, CI (Ettinger's group) requires $28,000 to be
available at time of death.  Alcor requires $50,000 for neuropreservation
and $120,000 for whole body preservation.  We won't do the suspensions
with LESS than that amount guaranteed.
 
ALL organizations suggest that you provide funding ABOVE the minimum
amount.  You never know what changes might occur to raise minimums
*before* you are frozen, so that extra helps cover you.  For instance, I
have chosen neurosuspension but have purchased a $100,000 insurance policy
to provide margin for the future.  Why go to all this trouble for decades
but risk your future by funding your suspension at the lowest possible
level?  In addition, the more funds your organization has *while* you are
frozen, the more secure that organization will be in inevitable times of
trouble.  Bob has acknowledged that it is really the overfunded CI members
in suspension which have put CI in the solid financial shape they appear
to be.  Alcor has benefitted greatly from at least one member in
suspension, Richard Clair Jones, who left us a large additional donation.
 
So far, Alcor has "grandfathered in" members with smaller suspension
minimums when we raised minimums for new members joining after a certain
date.  So we have a very few members with official minimums of $35,000 for
neuro and quite a few with minimums of $41,000.  Thankfully, many of them
have actual funding of $50,000 and up.  We felt that long-term members had
helped Alcor in many other ways by being involved in early suspensions and
administration and by paying dues all those years to keep us afloat.  If
we can afford to do so, we really want to hold the line on them.
 
The attitude of some people that "I don't want my suspension organization
to get any more of my money than they absolutely need" mystifies me.
People want the best suspensions; but they don't want their organizations
to pay living wages to the employees and they don't want to pay for
research to make the suspensions better.  They are willing to trust their
suspension organizations to freeze them and take care of their *brains*
and bodies for decades or centuries, but they aren't willing to trust that
same organization with extra money.  They want and expect these
organizations to repair, revive, and rehabilitate them in the future; but
they don't want *their* money to help with that.  What good is your money
if you don't make it into -- and eventually get out of -- cryonic
suspension?
 
--  Ettinger in #9803 says
 
>(3) CI DOES formally guarantee that there will be no price increases for
>those members who pre-pay their suspension fees. We believe this is sound,
>in overall context, because CI is earning money on the invested sums while
>the member is still alive, as well as for the aforementioned reasons.
 
Alcor's policy is the same for prepayment and for the same reasons.
 
 
--  Alcor's current minimums are actually based on months of research on
both current costs and future expectations.  So far, I don't see a reason
to believe that Alcor will have to raise even its minimums for newly added
members any time soon.  Right now, storage costs per patient are going
down every couple of years (due to better technology and better tracking
of costs, in addition to the simple fact that patient storage is the part
of cryonics most able to take advantage of economies of scale), which may
balance the rising costs of the medically-oriented "up front" procedures.
In addition, our Patient Care Trust investments have done so well during
the past four years good economy and stock market that income right now is
double our costs (that won't last forever, of course -- bad times will
come again).  As long as storage cots continue to drop, it is possible
that we could lower the amount that goes into the Patient Care Trust in
order to pay for somewhat higher up front costs.
 
However, a major jump in technology might indeed require an increase in
the minimum funding required.  At that time, Alcor will have to decide if
we will limit patients to the one, high-price, high-tech procedure or
offer one or more lower-cost alternatives, as Bob Ettinger proposed CI
might do:
 
>Of course, this guarantee only reflects current methodology. If more
>complicated and more expensive preparation methods are adopted in the
future, the use of THOSE methods will not be included in the guarantee;
>but we will still (if necessary) prepare the patient by the older methods
>at the guaranteed price. (In fact, eventually we may have a range of
>options, some of them even cheaper than current procedures.)
 
This brings up a moral question, though, which will be hard to evaluate:
we don't want to offer cheaper procedures which offer no preservation of
memory and identity.  I can guarantee that we will not offer *cremation*,
for instance.  But are there procedures being used in cryonics today that
are the practical equivalent of cremation?  We don't know right now; but
that will be a BIG debate in the future.
 
In Message #9805, Henry R. Hirsch <> asks:
 
>But what about maintenance and the cost of reanimation? The same argument
>applies with respect to inflation, except that now I am "dead" and can't
>come up with any more money. I, and perhaps others, would be interested
>to learn how Cryonics Institute, Alcor, Cryocare, and Transtime handle
>this problem.
 
Well, Hank, after reading CryoNet for a couple of years, you may not be
surprised to learn that "opinions differ" on that one, even within
organizations.  Personally, I think our funding in Alcor's Patient Care
Trust is well protected.  It is certainly earning well above our costs
right now.
 
Alcor has some $1,600,000 in Trust assets (sorry, exact figures are not in
front of me), including the patient dewars and equipment, and some
ownership position in the building which houses the patients.  In the
general neighborhood of $600,000 is invested through Smith-Barney in
stocks and bonds, by at least five different strategies.  All have done
VERY well the past couple of years.  Another $600,000 or so is the
mortgage on the building Alcor's patients are in.  Renters, including
Alcor and four other tenants, pay rent to the ownership company (a Limited
Liability Company of Alcor members and Alcor itself), which makes mortgage
payments to the Trust.  The mortgage interest alone more than pays for the
costs of keeping the patients in suspension, allowing the other
investments to grow untouched.  This is likely to continue for several
more years at least.
 
I think that this investment growth, plus the inevitable overfunding that
some members will provide to Patient Care in the event of their
suspensions, may well provide enough earnings in a couple of decades to
fund significant research in reanimation, PLUS end up with enough funding
to handle the costs of repair, revival, and rehabilitation.  Compound
interest alone can greatly swell an account given enough time, and we are
doing much better than that.
 
In any case, we are not going to go after your estate or your relatives
for more money in the future.  Your cryonics provider will be stuck with
whatever amount of money you give them.  I think it is prudent to make
sure they are stuck with *more*, rather than less.
 
----------------------------------------------------------------------
In Message #9806,  B. F. Shelton <> asks:
Subject: Fee Increases to Current Members
 
>For those who have the cash, it would seem prudent to keep the guaranteed
>funds invested with accumulation of returns to meet or beat inflation.
>If the company is paid up front, of course, it could do this, and relieve
>the individual member/customer of such worries.  Is this how some
>companies currently handle funds from people who pay the entire
>cryopreservation fee upfront (hopefully they don't just spend it!)?
 
Prepaid suspension fees at Alcor are placed in a federally insured
account (usually CDs) and may not be touched, except for a tiny service
fee, for any reason until the member goes into suspension.  (And we have
never even bothered to claim the service fee on our prepaid accounts).
This is in Alcor's Bylaws.  The money MUST be available when the
suspension occurs.  I would not trust a cryonics company if it did not
have similar restrictions.
 
Steve Bridge

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