X-Message-Number: 13580
From: "John de Rivaz" <>
References: <>
Subject: Re: Life Insurance vs direct investment
Date: Mon, 17 Apr 2000 16:25:33 +0100

I would like to state a different point of view to Mr Hoffman's on cryonics
funding. I think that there should be many different methods as possible to
suit different people's requirement, and I certainly don't want Mr Hoffman
to go away or shut up. On the contrary I want to express my thank to him for
taking the trouble to make the contribution of his articles. We all need to
hear as much as possible about the benefits of different methods of funding
and eventually to make our own choices.

----- Original Message -----
From: CryoNet <>
To: <>
Sent: 17 April 2000 10:00
Subject: CryoNet #13567 - #13578
> Message #13569
> From: 
> Date: Sun, 16 Apr 2000 08:03:24 EDT

> If they live outside the United States this is understandable, as
> life insurance for the purpose of cryonic suspension is EXTREMELY
> outside the United States.  (I am the leading writer of cryostasis
> in the world, and I do NOT have any carriers that will write outside of
> country.  Although I am working on it diligently.

Have you tried Crown Life? When I was sniffing about the life companies in
1980 Crown Life were willing to provide cover and pay for me to be medically
examined by a UK physician of my choice. I never took this up as I went the
investment route, but the offer was there. This international company may
have been taken over by someone else, as I did have a private medical policy
from their UK offices for a while and I do know that they were taken over by
PPP, although PPP may just have bought their medical business.

> Here are the facts.  Jack, a healthy nonsmoker, can create an INSTANT
> $120,000 to fund  his suspension in a permanent Universal Life policy.
> Once he pays 80 bucks  and qualifies, there is an IMMEDIATE and SURE
> payment to his cryonics organization to assure  his  suspension.

Surely someone could just as easily tie up the life company in litigation as
they could any other trust?

> The money does not go the cryonics organisation at the expense
> of the  survivors.

The survivors could argue that Jack could have paid the money into a mutual
fund and bequeathed it to them. *Anything* Jack spends during his life is at
the expense of his survivors, because it diminishes his estate not only by
the amount spent, but by what that amount would have realised had it been
invested at the same compound rate of the rest of his investment portfolio.
This point is made with respect to taxation over and over again in the book
Sovereign Individual by James Dale Davidson and William Rees-Mogg

Survivors could find a lawyer willing to argue this in court and that the
should be made over to them. Even if the lawyer lost, the courts would
surely freeze payoff of the policy until that matter was settled.

> This $120,000 does not have to come out of the estate Jack is
> leaving for his  wife Mary and the children.

True enough, inasmuch as  the trust that forms part of the life policy and
the estate are separate legal entities. So would a trust comprised of equity
investments. But as said above, anything he spends reduces his estate, even
the cost of a pint of lager.

>  Nor do they have the opportunity of second  guessing Jack's choice
>  and delaying or litigating Jack's wishes.

as I said, are you sure? Is there a lawyer on Cryonet who can comment?

Suppose, to take an extreme instance, there is a case where someone commits
murder in order to receive a life insurance payoff. Do the courts permit him
to receive the money when he gets out of prison or to bequeath to whoever he
wishes if he is judicially exterminated? If a mechanism exists in this
instance, then it would exist in other instances.

As far as the courts are concerned they do not differentiate between
"crimes". After all, if you make a gain of $100k on the stock market the IRS
can enforce through the courts a large percentage of this (I don't know what
the percentage is in the US) You are "punished" by removal of money in just
the same way
as if you had committed a traffic offence or real criminal act (eg hitting
someone with a broken bottle in a pub brawl). If you fall out with your
family in life you are similarly
punished although the loss of money is not a tax or a fine but a divorce
settlement. Different name, same thing. So even if you fall out with your
family after death, the same thing could happen.

> On the other hand, lets say Jack puts his $80 dollars per month into a
> mutual fund.  Even  if he averages a great return, it will take decades to
> generate the required $120,000. (for CI it would be $28k)   What happens
> if Jack is struck by a truck on the way to work tomorrow?  There
> is no full  funding, and Jack will not be suspended.

What are your views on Jack taking out a 20 year reducing term assurance
policy whilst he builds his estate?

> Do you think Leroy could  find an attorney who would take this case?
> Could the money be tied up in a legal battle?

I would certainly agree that there enough evil people in the legal
profession who would quite happily use their skill to kill other people for
fee income money. Some may bring a case ordering a sick person to give up
ideas of experimental medical treatment that just may save his life in order
to help his grandchildren go to college with the money (and the lawyer a
hefty percentage of this if he wins. He may even win sympathy amongst
unthinking people for championing pretty little children against a smelly,
ugly sick old man greedy for more life. But they forget that pretty little
children grow into sick old people in time ...)

It probably true of any profession, even life insurance
salesmen or stockbrokers or mutual find managers, that some of their members
are evil and use their skills in a distasteful manner. Consider computer
programmers and viruses, for an example. Hopefully all the honourable
professions eventually turn such people into pariahs and drive them out. If
profession does not, then that profession as a whole will be regarded as
evil and the march of history will eventually trample it under.

> ... the incredible  financial  leverage that only life insurance provides.

only if you die soon after taking out the policy and the life company does
not contest whether the policy was taken out fraudulently (ie you hid a
medical condition - which may easily happen inadvertently.) If you take out
a policy and die soon, their suspicions must be roused. It is only fair on
their other clients. Can life companies demand that the client's body be cut
to pieces to determine the cause of death?

> ... the incredible  financial  leverage that only life insurance provides.
> *80 dollars per month =960 per year.  960 annual payment
>                     12 % after tax compound yield
>                     25 years to grow to $128,001
>                     (22 years at 15% after tax yield)
which is an increase of 5 times (24k to 128k)

If I had put up $960 per year and achieved the same growth as my equity
investment between 1990 and 1998 then I would now have $42,000. Inpayments
would have been $7690, giving  an increase of 5.46 times - about the same as
yours, but over only 8 years instead of 25. Over 25 years (unless I have
made a mistake in my calculations) a similar rate of growth would yield a
total of slightly over $36m. I would also point out that there are many
people who have done four times or more as well as I have with direct

so at the end of 25 years:
Life Insurance of $960/yr = $128k,
direct investment (with  mediocre investor) of $960/yr = $36m.
Even with a technology mutual fund giving a more modest 20% per year, the
result of investment in that would be $625k - six times better than life

Of course direct investment does not provide any life cover, so if you care
to advice what a reducing term policy would have cost over 25 years I can
factor that in, but it would have to be absurdly expensive to reduce the
$38m to $128k

[if I had included the period right up to now, even after the falls, it
would have produced an unfair comparison, in my view. But the inexorable
growth of technology over the long term will leave life insurance in the dim
far off distance if taken over a quarter of a century.]

Warning - stocks can go down as well as up and the past is no guide to the
future, but the same applies to life insurance and with no technology growth
there will be no cryonics revivals, so we are all wasting our money anyway.

Sincerely, John de Rivaz
my homepage links to Longevity Report, Fractal Report, my singles club for
people in Cornwall, music, Inventors' report, an autobio and various other
projects:       http://geocities.yahoo.com/longevityrpt

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