X-Message-Number: 1240
Date: 29 Sep 92 01:28:08 EDT
From: STEPHEN BRIDGE <>
Subject: CRYONICS Insurance

Steve Bridge
In Reply to Msg #1238 (from Keith Lofstrom)
 
     Keith, some of your reasoning is good.  It IS difficult to take on
new tasks and many companies have gone out of business by trying to take
on businesses they were ill-equipped to handle.  In any case, we have way
too many other problems to take care of first, and it will probably be
many years before we can hope to be an insurer ourselves.
 
     On the other hand, at least some of your reasons for Alcor not
becoming an insurer were wildly off-base.
 
>1)  Life insurance is profitable to life insurance companies because
>most life insurance customers treat it differently than we do.  The
>"average" customer is a breadwinner making provisions for supporting a
>family if they should unexpectedly die.  If they buy whole life or
>universal life insurance (which may not be wise for them) they are buying
>the product as if they will keep the insurance for the rest of their
>lives, when in actuality they usually cash out when the children leave
>home - receiving a small fraction of the death benefit.  The cryonics
>customer stays in, and has a much higher chance of collecting; as a
>result, we probably represent much less profit, as a group, to the life
>insurance companies.  We may even represent a net loss, but as a group
>are too small to set up "special" policies for.
 
     My New York Life Insurance agent says this is a total misreading of
how life insurance works.  They WANT you to live a LONG time.  They have
your money, Keith, and they are investing it.  The longer the insurance
company can keep your money and the longer they can persuade you to make
payments, the more money they make.  New York Life LOVES cryonicists.
They tend to buy larger policies; they frequently buy an extra policy
strictly for family protection; and they take care of themselves-- seat
belts, few smokers, careful nutrition.  Even more importantly: life
insurance companies make little profit for the first five years of a
standard whole life or universal life policy.  That is where they pay
their agents and management costs.  The real money comes with longevity.
Unfortunately, many men get divorced and so cancel their policies before
the profits can really start to build.
 
     **Cryonicists rarely cancel their policies or cash them in.**  And
even better, to build extra insurance as a hedge against future inflation,
many cryonicists continue to pay premiums long past the date when the
policy could be called "paid up".  We are a life insurance agent's perfect
customers!
 
>2)  Life insurance spreads over a larger, more diverse group.  We have a
>lot of the same habits, folks;  we are going to tend to die at the same
>time of the same things - like some terrorist dumping poison into Saul's
>life extension mix, or keyboards causing finger cancer.  Those "peaks"
>are going to be hard to handle financially and operationally as it is;
>the burden would be magnified if Alcor was doing moving money from its
>own investments to pay for suspensions.
 
     This is nonsense.  We are a very diverse group.  We don't live
together, we don't work at the same occupations, and most importantly, WE
ARE NOT THE SAME AGE.  We will "die" and receive life insurance payments
at roughly the same ratio as the remainder of the population, except
spread out over a slightly longer time period -- all to the good for the
life insurance company.
 
 
>3)  An Alcor providing life insurance would have incentives to drive away
>older members.  Milk 'em for 20 years, then start sending them
>fundamentalist bible tracts.
 
     Even sillier.  Our entire point to doing this is to have ourselves
frozen.  Why would we try to drive away any segment of the membership?
(Not to mention risking being homocide victims if we tried to push long
time members away.)
 
 
>4)  Now we would get to fight a whole new bureaucracy - the insurance
>comissioners!  They may not like it if we tune our term insurance tables
>for our subgroup and our needs, rather than the general public.  They may
>not like us, period.
 
     Now THIS is a real concern.
 
>5)  There is enough temptation for Alcor officers to abscond with the
>funds as it is.  I would like to keep the temptation as small as possible
>for as long as possible, especially if we are going to pay them peanuts.
 
 
     Uncertain; but there are better ways around the "absconding" problem
than to just take away responsibility.
 
      I don't have comments on the rest of your objections.
 
 
     Steve Bridge, Alcor Board member, but writing for himself.

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