Funding Cryonics: The Growing Popularity of Life Insurance Policies

Cryopreservation can be funded by prepayment, life insurance, and through a trust. Life insurance policies which designate cryonics centres as beneficiaries is the most popular method.
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Cryopreservation is a practice of freezing the body of a person who has just died in order to preserve it for possible resuscitation in the future, as and when a cure for the disease that caused the death has been found. As such, it involves the carrying out of a string of procedures, and the indefinite preservation of the members’ bodies until advancements in medical science can catch up. The cryonics service providers are thus faced with multiple costs, and hence require members to adequately fund their cryopreservation.

The minimum cost of cryonics ranges from $28,000, all the way up to $200,000. These either include, or are accompanied by additional costs for transport, payment for standby services, etc. In order to achieve optimum cryopreservation, all these need to be properly funded. This article provides an overview of the methods to fund cryopreservation, and their specific considerations.

Factors considered by Cryonics Service Providers

Once a person signs up to be cryopreserved, the service provider will be under a contractual obligation to duly provide their services. Cryonics organizations have learnt from past instances that a cryopreservation procedure should only be started after all the fees are paid up, and living relatives should not be allowed to pay on their behalf in installments. Regardless of the method, here are some funding requirements that cryonics facilities look for:

  • Funding the minimum: Every cryonics service provider requires their members to fund at least the minimum cost of cryopreservation. They also encourage overfunding it to meet contingent and uncertain expenses. Overfunding will also enable them to combat inflation, and help cover increased costs in the future, seeing as they have to provide cryopreservation for an indefinite period.

  • Availability of funds: Service providers seek to ensure that the funds will be made readily available to them upon the legal death of the member. Since the preliminary procedures of cryopreservation are to be carried out immediately after death, this is an essential requirement.

  • Uncontested: The high cost of cryonics is likely to take a large bite out of the inheritance which otherwise would have devolved upon the legal heirs. This could give rise to possible legal challenges by legal heirs; at least by those who do not believe in cryonics and claim the funding invalid. Fighting these legal battles can cause unnecessary delay in the funds being made available to the service providers, thereby placing them in a difficult situation. To ensure this doesn’t happen, they suggest that the funding for cryopreservation be kept separate from the one to be left behind for legal heirs.

Different ways of funding cryopreservation

Cryopreservation funding can be done in various ways, depending on the health and financial conditions of the member. The different methods are detailed below:

Prepayment

The least complicated way to fund cryopreservation is by paying the whole amount when signing-up. Alcor, Cryonics Institute, and KrioRus, all accept prepayment of the fee. This can be done either in cash or cash equivalent such as saleable securities, Bitcoins, etc. The money paid is held in a separate account opened specifically for each member, until required. Any interest earned during this period is retained in the account. Cryonics Institute exempts its members, who have prepaid their cryopreservation fees, from future price increases.

While procedurally this seems to be the easiest way to pay for cryonic-suspension, it is not feasible for all. Members are hesitant to pay a lump sum upfront either because they do not have the resources at that moment, or because they do not want to take on such a big commitment.

Life Insurance

Insurance is generally used to provide a financial cushion for the family, or a similar beneficiary, in the event of death. However, it is also the most popular and affordable method used to pay for cryopreservation. The majority of those who have signed-up have opted to fund their suspension through their life insurance. While there is no such thing as a “Cryonics Life Insurance”, life insurance policies are still used for cryopreservation.

This is done by purchasing a policy and designating the desired cryonics service provider as the beneficiary of the policy, ensuring that the death benefit received upon the legal death of the insured is transferred directly to the service provider, so that it can immediately be used for cryopreservation. Care should be taken to establish whether the insurance cover that was purchased meets the minimum funding requirements of the service provider. Members are often advised to overfund their insurance policies so that unforeseen costs can be easily met.

Types of Life Insurance

All different types of life insurance can be used to fund cryonics. Although a ‘term life insurance’ may be less expensive, it is bound to expire after the stipulated time, in most cases, before the death of the insured. Thus, you also run the risk of having your cryopreservation agreement terminated. To counter this, a ‘whole/permanent life insurance’ can be used. While slightly expensive, this provides insurance coverage for the entire life of the insured. This policy usually has a savings component built into it where money accrues over a period of time, and can be used to pay premiums.

A novel type of life insurance is the Indexed Universal Life Insurance. This is said to work well for the purpose of funding cryonics as it is flexible, while also being permanent. Performance is index-linked to the S&P 500, thereby maintaining premiums in keeping with current interest rates.

The table below compares the different types of life insurance based on the following relevant criteria:

Duration
Premiums
Death Benefit
Cash Values
Interest Rates
Price
Term
Fixed Term
Fixed
Fixed
No
N/A
$
Whole Life
Permanent
Fixed
Fixed
Yes
Guaranteed
$$$$$
Universal Life
Permanent
Adjustable
Adjustable
Yes
Determined by the carrier; variable
$$$$
Guaranteed Universal Life
Permanent
Fixed
Fixed
No
Guaranteed
$$
Indexed Universal Life
Permanent
Adjustable
Adjustable
Yes
Indexed on S&P 500, capped
$$$

Types of life insurances and their comparison. Source: Lesswrong

Furthermore, any anticipated costs associated with cryopreservation can be covered using insurance ‘riders’ like the accelerated benefit rider which pays out a portion of the death benefit before the actual death of the insured.

Other Considerations

Getting life insurance to cover cryopreservation is only beneficial if secured before the person becomes terminally ill, or reaches an advanced age. The general consensus all around the world about insurance is that “the older one gets, the more difficult and expensive it becomes to insure themselves”.

Another important requirement is that policy premiums are to be paid on time. If the policy lapses, the cryonics service provider will be forced to terminate the cryopreservation agreement. In addition to being the named beneficiary of the insurance policy, Alcor requires that they be named the owner of the policy as well. The Cryonics Institute on the other hand requires proof of the sum insured, their designation as beneficiary, and periodic reporting that the policy is being paid in full and remains active.

Funding through life insurance outside the US

A large majority of the patients who have been cryopreserved or have signed-up for the process hail from the United States of America. As such, there are quite a few insurance companies that understand and cater to the requirements of funding cryonics. However, there are also a growing number of insurance service providers outside the US that specialize in providing life insurance policies for the purpose of cryonics.

Unusual Risks, in the United Kingdom, provide comprehensive services and assist in all the funding requirements relating to cryonics. Their services are two-fold: they advise new clients and ensure that their policy increases in tandem with inflation, and also provide services to existing members, to modify and alter their life insurance policies.

Tomorrow Biostasis, a German-based cryonics service provider which partners with Versicherungskammer Bayern, provides term-insurance cover for funding cryonics. Once this expires beyond renewal, they use alternative options such as directly funding the cryopreservation, or doing it through a whole life insurance, once sufficient funds are accumulated.

Zurich Life Insurance is another insurance provider catering to cryopreservation payouts in Europe.

Alcor and Cryonics Institute encourages their overseas members to fund their cryopreservation by naming the service providers as the beneficiary. Special relaxation is also provided to those in the UK, where insurance companies refuse to name a US organization directly as the beneficiary or the owner of the insurance policy. Members can put the insurance policy in an absolute trust with the cryonics organisation as the beneficiary of the trust instead. The trustees will then be under an obligation to pay the death benefit from the insurance to the cryonics organization.

However, the situation may not be as favourable in countries such as India where insurance companies generally refuse to name any corporation as the beneficiary of a life insurance policy. Interestingly enough, KrioRus, the Russian-based cryonics organization, does not allow funding through life insurance. According to them, this is due to “low-efficiency and reliability of insurance companies”.

In instances like these, the person desiring to be cryopreserved can do so by obtaining a policy from a US insurance provider. Rudi Hoffman, a financial planner in the US, provides comprehensive advice and assists cryo-enthusiasts from outside the US throughout the signing-up and funding process. These, however, require some non-negotiables to be met such as: the policy has to be for a certain value, medical records for at least the last five years have to be in order, etc.

Therefore, this is a possible alternative for those outside the US to fund their cryopreservation through life insurance.

Trusts

Another way to fund one’s cryopreservation is through revocable trusts. Cryonic service providers often have a sample, or a model trust document based on which individual members can draw up their own trust deeds. It can be tailored to suit each individual’s specific needs. Additionally, Alcor has its own Standard Trust, through which secure funding can be provided for cryopreservation, which would be independent from the member’s estate.

Annuity

This method is specific to Alcor. A lump sum is paid to an insurance company, to establish an annuity, where amounts above the minimum funding are added. This retains the certainty of funding without having to actually purchase life insurance. More details can be found on Alcor’s funding page.

Other funding options

Although options other than these are severely limited, Alcor provides for partial funding from real estate and other assets of the member. These, however, come at a cost of 50% on top of the funding to allow for risk mitigation, as the assets do not have a fixed value. This is a discretionary method of funding, subject to Alcor’s approval. The 50% cost addition makes this option less-lucrative and more expensive, but might come in handy to those who are cash-strapped and have more assets at their disposal, or have become uninsurable.

Repaying the insurance company upon reanimation?

Since the end-goal of cryonics is the reanimation of those who are preserved, the question that still remains to be answered is whether the revived person will have to repay the insurance company after reanimation because, after all, they would no longer be dead.

Legally this is not possible for two reasons. Firstly, the insurance company’s sole function is to pay out the death benefit to the named beneficiary, upon the production of a valid death certificate. This is how they normally function, and do not suffer any loss by paying out the death benefit. As reanimation is not stipulated in the insurance contract terms, there would be no question of repayment.

Secondly, reanimation is currently uncertain. Therefore, including this in the insurance contract terms and conditions would turn it into a wagering agreement, which is void under most legal systems.

Additionally, the prevalent view is that once the person is reanimated, they ought to be considered a different person. This is because in the eyes of the law, people who are legally dead will always remain dead. Until future developments in medical science give way to concrete data and legal systems can be modified, the reanimated person would be under no obligation to pay back the insurance.

Cryopreservation, becoming increasingly widespread, can now be funded in multiple ways. However, the most common method is through life insurance. Although this has grown to become a fairly straightforward process in the US, Canada, UK and some other parts of Europe, members in other places face hurdles in signing up and funding the process. This is largely due to cryonics not being as popular, and the process not having yet reached an empirical conclusion. Over time, there is scope for more development. As more people, from different parts of the world opt for cryopreservation, the demand for life insurance specific for the purpose might grow. Until then, the existing options can be explored.

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