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taw comments on Normal Cryonics - Less Wrong
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I'm inclined to believe this number is a lie, as I refuse to believe you are stupid enough to make mistakes of this order of magnitude.
The claimed $180/year (claimed $300 figure minus membership costs) * 50 or so more years people will live only gives $9k. Safe investment gives you barely enough to keep up with inflation, so you cannot use exponential growth argument.
Real costs are around $100k-$200k reference.
Real life insurance costs increase drastically as you age, and as your chance of death increases. Surely you must know that. If you paid the same amount of money each year, you'd need to pay $2k-$5k depending on your cryonics provider and insurance company overhead.
What will very likely happen is people paying for life insurance, then finding out at age of 70 that their life insurance costs increase so much that they cannot afford it any more, and so they won't see any cryonics even though they paid big money all their lives for it. (Not that chances of cryonics working are significant enough for it to make much difference).
My current life insurance policy is what is called "term life insurance". It is good for a term of 20 years.
The payout if I die within those 20 years is $500,000.
My monthly premium is $40 for that whole 20 years.
You can get an instant online quote here. You don't have to put in real name and email address.
Even assuming best health class - something which won't happen as you age.
In other words, this is exactly what I was talking about - it's a big fat lie to pretend your premium won't change as you age.
I'm 32. I fit in the "Preferred" health group. 30 year term life insurance with a 100k payout is 168/year as per the quotes page I provided above.
As AngryParsley mentions, if you purchase term life insurance you're planing on having savings to cover your needs after your policy expires. This is my plan.
However, I suppose in say 15 years, I could purchase another 30 year/100k term insurance policy. Let's say I slip a category to "Standard Plus".
My premium will be 550/year. That of course assumes I didn't save anything during those 15 years (not to mention the remaining 15 years in the original policy) and need a 100k policy.
Term life insurance is not the only type available. Most people who get term life insurance plan on having enough money saved up by the time the term runs out. Whole life insurance has no change in premium for the entire lifetime of the insured.
"Funded by life insurance" strikes me as an oversimplified summary of a strategy that must necessarily be more sophisticated. Plus "life insurance" actually means several different things, only some of which actually insure you against loss of life.
I'm still trying to find out more, but it seems the most effective plan would be a "term" life insurance (costs about $30 a month for 20 years at my age, 40ish and healthy), which lasts a limited duration, isn't an investment, but does pay out a large sum to designated beneficiaries in the event of death. (I haven't done the math on inflation yet.) You would combine that with actual long-term investments earmarked for funding the actual costs of the procedure if you need it after 20 years. These investments may be "life insurance" of the usual kind, or stocks, or whatever.
Doing that mitigates the scenario I'm really worried about: learning in 2 to 10 years that in spite of being (relatively) young, healthy and wealthy I have a fatal disease (cancer, Lou Gehrig, whatever) and having to choose between my family's stability and dying for ever. Cryonics as insurance against feeling dreadfully stupid.
In twenty years I expect I will have obtained more information, and gotten richer, and might make different choices.
I'm interested enough in cryo that I'm actually trying to get actual quotes, as opposed to merely speculating; I have gotten in touch with Rudi Hoffman who was recommended earlier on LW. My situation - non-US resident - might mean that whatever results I get are not really representative, but I'm willing to report back here with whatever info I get.
taw, real life insurance costs increase drastically as you age, but only if you are beginning the policy. They don't readjust the rates on a life insurance policy every year; that's just buying a series of one-year term-life policies.
I.e., if I buy whole-life insurance coverage at 25, my rate gets locked in. My monthly/annual premium does not increase as I age due to the risk of dying increasing.
How does the insurer hope to make a profit, given that they're probably betting on death being inevitable?
In the UK these are called life assurance policies. Assurance, because the event (death) will assuredly happen. You pay a fixed annual sum every year; the insurance company pays out a lump sum when you die. It is a combination of insurance and investment. Insurance, because the death payout happens even if you don't live long enough for your payments to cover the lump sum. Investment, because if you live long enough the final payment is funded by what you put in, plus the proceeds of the insurance company's investments, minus their charges -- part of which is the cost of early payouts to less fortunate people.
Some versions have a maturity date: if you're still alive then, you collect the lump sum yourself and the policy terminates. At that point the lump sum will be less that what you could have made by investing those payments yourself. The difference is what you are paying in order to protect against dying early.
As always, remember that investments may plummet as well as fall.
AngryParsley did a good job summing it up below.
1) While death is inevitable, payout is not.
2) Investment income.
3) Inflation eroding the true cost of the payout.
"Lie" is much too strong a term, but I get the same result when I multiply 180 by 50, and I'm curious to understand the discrepancy.