X-Message-Number: 2993
Date: 17 Aug 94 21:01:49 EDT
From: Mike Darwin <>
Subject: CRYONICS life insurance

Derek Ryan's comments on the problems of group insurance for cryonics were
enlightening and much appreciated.

However, when he goes on to comment about problems with self-insurance for
cryonics I think he is less on the mark:


>And if we took on the responsibility (and hassle) of determining 
>their health (i.e., risk of death) for ourselves, the way that insurance 
>companies already do, then we would basically be giving those 
>terminal patients a strong incentive to lie to us.

>Sounds like a recipe for disaster to me.  To drastically paraphrase 
>Mr. Szabo, "Better the insurance companies than us!"  (I.e., I'll feel 
>much better if the onus for determining whether a given individual 
>is healthy is left with the insurance companies.  They can afford a 
>mistake or twenty.  We can't.)

It is a *given* that if you are selling insurance you *must* take on the
responsibility/hassle for determining the client's heath.  That is an essential
element in life insurance!  Indeed, determining the risk is *exactly* what

successfully selling insurance is all about!!!!!  And yes, terminally ill people

have the same incentive to defraud insurance companies for MONEY for the next of

kin, etc.  There are mechanisms in place to deal with this very generic problem.

Is this a hassle?  Well, yes and...no.  For one thing the technology to do this
is very well established. The first and most important thing to realize is that
AGE is the single biggest determinant of risk.  The next thing to realize is
that almost all terminal or life span shortening disease results in very

significant changes in body structure and function by the time it is detectable.
The third important fact to consider is that the client must not lie to you and
s/he must agree to make his/her medical history available to you so you can
assess the risk accurately.


Between these three"filters" there is a great deal of statistical certainty, and

indeed, weeding out poor risks is the easy part of the insurance business.  I am

often astounded at how easy and cost effective it is to do this.  Most insurance

companies don't even bother to do more than ask you questions for modest amounts
of insurance (and determine your age!).  Larger amounts of insurance simply
involve a blood test, urinalysis, simple medical exam BP, HR, weight, general

appearance) and access to medical records.  Why?  Because it takes a lot to kill
somebody and by the time you know, it is likely your MD will know it too.  If
you lie, that is *fraud* and the company is *not obligated to pay off.  Period.
There are many commercial services that specialize in doing risk-assessment
physicals for insurance companies for very modest fees.  Any cryonics insurance
company would no doubt use such services or provide them in-house (see below).

A well run cryonics organization with access to competent medical personnel (a
*good* medical director, an RN or two on staff, etc).  would likely be BETTER
able than the average insurance company at assessing risks.  Indeed, a
gerontologist with an extensive background in preventive medicine and the
effects of risk-assocaited behavior like Steve Harris, MD could probably select
the best of the best of the clients reducing risk (and increasing profits) well
beyond that of the conventional insurance company.

Added advantages of using such costly personnel (which you need to have
available anyway) are:

1) You get to use them to make money during periods of time when they might
otherwise be unoccupied.

2) Per #1 you get have people available full-time who would have been available
only part-time because you have another revenue center to pay for them.

3) As previouisly stated you can (cost effectively) bring tighter screening to
bear on clients thus improving profitability.

4) Better screening (i.e., more "invasive" knowledge of the client's risk

profile) means an advantage for business planning for the cryonics organization.
Derek describes knowing about the client's risk profile as a hassle; far from
it!  Knowing about you clients' risk profile is a powerful business advantage
which will aid in both long and short-term money management and planning.  This
kind of knowlege will get more and more useful and more and accurate as the raw
number of clients rises since the statistical certainty will improve as well.
One of my frustrations in the past has been the inability to know the client's
health status in detail; this makes planning more difficult.  The more I know

the more I can be prepared for and the more intelligent the decisions I can make
about where to position equipment (and do so economically in advance of
immediate need rather than waiting till the last minute and paying sky-high air
freight prices, etc).  

In short, asessing clients' health status isn't a hassle, it's one of the most
powerful tools for effeciency and cost-reduction which a cryonics organization
can have at its disposal.

And once again, since we need to be doing this anyway, we might as well charge
for it.

Finally, as I've previously pointed out (without rebuttal) there is the problem
of remote standby.  That is a problem that is not going to go away and it is
also intimately tied in with the clients' health and prospects for survival.

Mike Darwin





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