Why Fund Your Suspension with Life Insurance?
by Rudi Hoffman, CFP®
“I expect to have the money to fund my suspension in cash eventually. Mr. Hoffman, why should I take out a life insurance policy to fund my suspension?”
This question in some form comes up often in discussions with people with an interest in cryopreservation. The good news is that there may be valid answers that may make sense in individual situations.
The purpose of this article is to answer this question in a clear, concise, understandable manner. Additionally, we will look for an empirical way of determining the optimum funding that can be appealing to many rationally minded cryonicists.
Let’s personalize this with a discussion of a hypothetical individual “Jack” who is a 45 year old software developer.
“Okay, Jack, so you want to be cryogenically frozen with the possibility of future re-animation. You have thought about it for some time, but you are of a skeptical and questioning nature, and you have a consituency in the form of a wife and family who are not at all sure if you have not gone off the deep end and do not share your enthusiasm for the possibilities of technology”.
“You want to create $150,000 to fund the costs of standby, transportation, and cryonic suspension with a cryonics organization. You are excited because your savings investment has been growing well, your career is taking off, and you expect to be seriously wealthy in the future. You want to do the best thing to assure your funding. You have negotiated with your wife, and you and she have decided that you can spend $1200 dollars per year towards cryonics funding.”
Here is the key question. Is is better for Jack to spend his 100 dollars per month in a savings investment, or a life insurance policy, to fund his suspension?
Here are the facts. Jack, a healthy nonsmoker, can create an INSTANT $150,000 to fund his suspension in a permanent Universal Life policy. Once he pays 100 bucks and qualifies, there is an IMMEDIATE and SURE payment to his cryonics organization to assure his suspension. The money does not go the cryonics organization at the expense of the survivors. This $150,000 does not have to come out of the estate Jack is leaving for his wife Mary and the children. Nor do they have the opportunity of second guessing Jack’s choice and delaying or litigating Jack’s wishes.
On the other hand, let’s say Jack puts his $100 dollars per month into a savings investment. Even if he averages a great return, it will take decades to generate the required $150,000. 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 if Jack lives long enough to have adequate funding in his account? When Jack “dies” there is $150,000 which Jack has earmarked for his suspension. But this $150,000 is a much clearer target for any of Jack’s potential heirs to contest.
Jack’s kids all turned out great. Except for the youngest, Leroy, who felt the world owed him a living. Jack had left each his children $200,000 in his will. But Leroy wanted at least part of the $150,000 Jack had earmarked for suspension! Do you think Leroy could find an attorney who would take this case? Could the money be tied up in a legal battle? Do will and estate contests occur over much less controversial issues than funding cryostasis? Absolutely! And these funding controversies HAVE and WILL CONTINUE to occur.
There are other issues. If Jack is not insurable due to health reasons, he will not be able to obtain life insurance to fund his suspension, and he would be forced to fund his suspension from his estate.
Some people become uninsurable at some point in their lives. It therefore makes sense to find out how affordable it may be to fund your suspension with the financial leverage that life insurance can provide. It the case of cryonicists, the policy may truly become LIFE insurance — not DEATH insurance.
Cryonicists tend to be life extensionists who take great care of themselves and thereby can usually qualify for the best possible insurance rates. (I spend a good deal of time explaining this information to insurance companies!)
In conclusion, for many people it may make sense to use life insurance to fund the exciting possibilities of cryonic suspension.