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bgrah449 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).
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.