Cryonics Institute -- Funding for Human Cryopreservation

> FUNDING CRYOPRESERVATION

with the Cryonics Institute

MEMBERSHIP FEES
	MEMBERSHIP	INITIATION	HUMAN CRYOPRESERVATION
OPTION ONE	$1,250 once	none	$28,000
OPTION TWO	$120 per year	$75 once	$35,000
(Human cryopreservation prices do not include "Local Help" cost for a funeral director or shipping, which can range from nothing in Michigan to $3,000 on the US west coast -- and more overseas.)
Membership gives the privilege of making arrangements for human cryopreservation, pet cryopreservation or tissue/DNA cryopreservation
Click Membership page to join the Cryonics Institute
STANDBY AND TRANSPORT FROM SUSPENDED ANIMATION, INC.
Insurance-funded costs for basic SA Standby/Transport plus CI Perfusion/Storage:
	OPTION ONE	OPTION TWO
	$88,000	$95,000
Click Suspended Animation, Inc. for details on costs, terms and procedures

REMINDER: The fee for cryopreservation at the Cryonics Institute is a one-time payment; there are no further charges. The bulk of the money is invested, and the return on the investment pays for ongoing care for as long as necessary.

Funding the cryopreservation fee is usually done through life insurance. We also accept an in-trust account at a bank, or payment in full in cash, or in a variety of other ways: we work with individual members to suit their needs and capabilities.

Money that is prepaid to the Cryonics Institute is held in a special savings (not checking) account which requires the signature of two Officer-Directors for withdrawal. The prepaid money is invested in T−Bills through a Treasury Direct account connected to the savings account. Although those who prepay do not receive interest from their prepaid funds, they do have the assurance that there will be no delays or questions associated with funding if the time comes when rapid cryonics rescue is required. The Cryonics Institute will refund any prepaid money to the CI Member within 30 days of the request for the refund.

Bequests cannot ordinarily be used for primary funding, because of the delays and uncertainties of probate.

Some frequently asked questions about life insurance:

Q: What's this 'funding through life insurance' business all about? I thought you'd have to pay a full cash payment up front?

A: You can pay for your cryopreservation in advance at any time, if you want. It's probably the safest way to do it, and we certainly don't discourage it. But most people set up a policy with an insurance company.

They pay an annual premium to the insurance company - often no more than a few hundred dollars, if that -- and after their demise, the insurance company pays the Cryonics Institute an amount sufficient to cover the member's cryonic suspension.

Q: Is any special form of life insurance required, and is any particular company recommended?

A: No. We do need proof -- updated at least annually -- that CI is the beneficiary and that the amount is sufficient. Otherwise, whatever suits you is usually all right. But a couple of reminders are in order:

First, although term insurance is cheapest, it must be renewed periodically at higher prices and it may become unaffordable when you become elderly. However, there are term-to-100 policies and similar types of term insurance that have fixed rates (rates never increase) for the whole life of the policy.

But term insurance -- which has no investment component -- may still be the most appropriate way of funding a contract if you also have a savings or investment program which down the road will suffice to fund your cryopreservation as well as your retirement.

Other types of insurance, such as "whole life" and "universal life" have an investment component. Whether the "investment" is worth while depends on many factors which you alone -- or your advisers--can evaluate. A danger with whole life policies is that someone can sue for the cash value of the policy.

A very rare problem is that the company may not want to recognize CI as being an acceptable beneficiary. We have not encountered that for quite a long time, but if it should happen you would need another company.

We have a list of insurance agents with experience drawing up cryopreservation agreements, and as its length indicates, getting a policy from a reputable organization is generally no problem at all.

Q: If I am not "really" dead, will the life insurance company still pay off? If I'm eventually revived, will the life insurance company demand its money back?

A: Don't worry. Insurance companies pay off on receiving a death certificate -- they aren't concerned with what happens to you after that. The actuarial statistics are not affected, and the company suffers no unusual loss.

Actually, insurance companies benefit from cryonics. A member still needs the usual insurance to protect his family, and additional insurance to fund the cryonics contract. Once cryonics becomes commonplace, life insurance companies will benefit handsomely.

Q: Suppose my wife and I are elderly and cannot buy life insurance. Our home is worth more than enough to pay the CI cryopreservation fee for both of us, but we need to keep it and reside in it while we live. Can anything be done?

A: Maybe. CI generally cannot afford to take financial risks or accept delays in payment for cryopreservation. At the same time, we understand that financial circumstances for some may be difficult and we try very hard to accommodate the needs of people. We will be as flexible as prudence allows. Depending on individual circumstances, for instance, a somewhat larger than usual suspension fee might justify a greater than usual delay in payment.

Our officers will investigate special cases, and our directors will make the decision. Talk to us about it. By all means let's get together. We may be able to work something out. But there must be an agreement in hand, signed by both parties, before we can accept any patient.

Q: Is life insurance the best way to fund a contract?

A: Not necessarily. John de Rivaz is a long-time British member of the Cryonics Institute. Below are his suggestions for funding a CI contract (and perhaps also providing for your retirement) through an investment trust, or a combination of term life insurance and investment trust.

Incidentally, Mr. de Rivaz himself been very successful so far in applying his strategy; but of course neither he nor we are professional investment advisors , and the following is offered only as one man's opinion, not our official recommendation. (We have not changed the British language usage.)

"The cheapest way to sign up for cryonics suspension is to have a portfolio of equity investments in a revocable trust. These investments will grow and work for you as well as supply your suspension funding. Life insurance has to be paid for, which means your investments are much less efficient. Your money is used to pay the high fees of financial professionals instead of working for you.

"If people are to be revived from cryopreservation, then there will have to be advances in technology that are not currently allowed for by stock market quotations. Therefore I expect that funds invested in technology will grow well beyond the expectations of professional financial advisors.

"If people are not revived for reasons of lack of technology, then they will not be there to observe this, which means it will not happen as far as they are concerned. Therefore your portfolio of investments should be in good quality companies in a cryonics trust. The Cryonics Institute already have a trust form that you can use.

"If you have little money at present, some cryonics organisations will probably try to persuade you to take out whole life insurance. I consider this will not give you the best possible financial performance. Instead I would recommend, in order of financial efficiency:

"1. If you wish to take the risk of dying young in an accident yourself, save money vigorously by investing in a technology unit trust until you have amassed enough to join the Cryonics Institute with a trust ready.

"2. Take out term life insurance for say ten years (very cheap if you are young), join the Cryonics Institute, and also save vigorously until you have enough for a trust.

"Investing in technology stocks should give, over a long term period, a good annual growth. Therefore the more you can invest early, the less you need to invest later. If you have very little now, ask a financial advisor for a technology based unit trust (such as Prolific Technology) or investment trust company into which you can make monthly payments. But avoid investing at the top of a "spike" such as March 2000, when the US tax gathering season caused a mass sell-off following millenium euphoria.

"Do not be persuaded to buy insurance bonds to save tax - if you have little money you pay no capital gains tax anyway. It is capital gains that will drive a technology fund up - the income is trivial or non-existent.

"A PEP may be advantageous only if it is a "no charges" PEP - some unit trusts run these to encourage people to invest in their units. I do not know if a technology one exists, - I would rather doubt it. Also the best technology unit trusts have some investments outside Europe so they do not qualify for PEPs. If you have little money the advantages of a PEP do not outweigh the advantages of a global spread of investments.

"PEP is Personal Equity Plan, an artificial construct of UK government which enables securities within it to be free of penalties on gains or income. However it has to be managed by a bank or other professional who makes a charge, even though the owner can select investments. Roughly the charge balances out the income tax recovered, but the freedom to trade without penalty on realising holdings for re-investment makes it worthwhile.

"It is shortly to be replaced by something similar called ISA. Individual Savings Account. The main difference is that there is a limit as to what can be introduced to an ISA. I think you have something like this called IRA, but there may be restrictions on withdrawal that are not present with PEP/ISA.

"Do not worry about stock market "shakeouts" and "slumps" - they happen from time to time, but over a decade or so you will find that your fund will grow dramatically. Making monthly payments means that you get more units when the market is down.

"Our civilisation is totally dependent on technology, and technologcial growth at that. If our civilisation survives, your funds will grow. If it does not, money will have no meaning anyway.

"Cryonics need not cost you very much beyond ordinary investment practise. If you are young and start these practises now, and if something better than cryonics comes along, you will still be able to afford it. Indeed, if you decide that cryonics is not for you, then you will still have the funds for other purposes. The revocable trust means that you retain full ownership and control while alive.

"If you save regularly and can achieve a good long term annual return with technology equities or funds, your investment will be spectacularly better than with any kind of life insurance."

- John de Rivaz

Does all of the above sound a bit much? Well, nobody said becoming immortal would be simple. But after all: it maybe simpler than buying or selling a house, and you usually do that several times during your lifetime. Plus, we have experienced and sympathetic people who've been through it before and will be more than happy to guide you through it.

Q: Which is the safest method of funding a cryopreservation?

A: Nothing in the world is perfectly safe.

Governments around the world strive to make everything perfectly safe. However this may well be an impossible task, and attempts often add to problems.

The various methods of funding a cryopreservation all have their strengths and weaknesses.

The risks of your affairs being managed by a Receiver.

One of the big problems with elderly people is that as they near death they are often not competent to handle their own affairs and a Receiver can be appointed. Also as death approaches confusion can increase in the management of their affairs whoever is in control.

A living will can at least enable the patient to say who that Receiver will be in the instance of incompetence.

Also, as people live their lives there is always the risk of some adventurer finding some slip that they have made during their lives (examples include: a mishandled divorce, sale of a lease, a guarantee that they thought was safe being called, or a mistake in capital taxation being uncovered by a tax audit) which renders their assets forfeit. It is often compound interest from an event many years ago, and professional charges, which amplify the cost beyond the victim's means. With the increase of computer data systems, companies have emerged to make profits from these situations by searching past transactions on official files for such mistakes. Victims of this can find that a receiver in bankruptcy can be appointed. He is going to have no sympathy for cryonics. It is his duty to the creditors to collect as much money as possible. Of course he gets a very substantial fee for so doing. This and any associated transaction taxes are taken from the victim's assets before the residue is handed to the creditor.

The only way of avoiding running the risk of not being cryopreserved as a result of the actions of a Receiver is to fund your cryopreservation in some irrevocable manner. That is to say you can't change your mind later.

Life Insurance

Life insurance is the most popular method of funding cryonics, and one of its important strengths is that a properly written policy is usually safe from a Receiver. Insurance policies with cash values can become the target of a lawsuit by a spouse. Term policies become prohibitively expensive with advancing age. Term-to-100 policies avoid both these problems, but are becoming increasingly difficult to obtain (one agent tells us they are now impossible to obtain). These policies have no cash value but pay out if the assured dies before reaching 100, or pay out if he/she reaches 100. They should be set up so that if the patient reaches 100 then CI gets the money. Bear in mind that the average lifespan is increasing and it is quite likely that some middle aged or younger cryonicists will reach 100. The fact that these policies have no cash value makes them immune to lawsuits, but of course if you are litgated you may not be able to afford keeping the premiums paid. (Most state laws protect life insurance policies from creditors, but make exception for a spouse. If lawsuit by a spouse is not a worry then lawsuits should not be a concern.) Cash value does have the advantage of providing a buffer against temporary periods when the insured is not able to pay premiums.

In order to provide the pay out, many types of life insurance have to have the premiums paid right up to the point of death. If one is missed, then the policy becomes valueless. Obviously once someone is under a receiver, life premiums may stop being paid. There are premium protection plans, but these are subject to specific situations and a patient could easy find that he has not met them all. There are policies which can become "paid up" and have some value even if no more premiums are paid. But this usually needs to be negotiated, not just initiated by the premium flow ceasing. Also such policies are usually more expensive.

Single payment "investment only" policies can be found, but they are few and far between. With one of these, there needs to be no medical evidence and no questions are asked. There are no periodic payments to be made. Therefore the chances of the company not paying because of a technicality are vanishingly small. But to get $X cover you need to provide $X. However this will be very safe unless legislation changes the immunity offered to life policies. In addition, your policy for $X will usually pay out more than $X because there are investment bonuses declared every year. (Hence the term "Investment Only") These bonuses could be useful for funding transport costs which rise each year well above average inflation. These policies are often used by elderly people to avoid death taxes, or to provide ready cash to pay death taxes on non-realisable assets such as a home that has been in the family for many generations. Again, governments may legislate against them if they feel that they are distorting the tax system or preventing re-distribution of real estate to an excessive degree.

Some people worry that as governments get more concerned about the funding of the care of an ageing population, legislation may well be enacted to removed this security. (ie they won't want people protecting their assets for the next generation at the expense of the state paying for their terminal care.) Also, once the proceeds of a policy have been made irrevocable, the insured has lost control of his money, which many people do not like.

We advise that all members make CI the owner of the policy - this strengthens the position of there is a dispute or litigation with Receivers or other third parties.

Revocable Trusts

The Cryonics Institute has a standardized revocable trust form which members can use, but there is no guarantee that it will be legal in every state or jurisdiction. If you make your own trust (or pay to have an individualised one made) this can lead to problems in funding if lawyers disagree over what it means. Even if a trust is deemed valid, CI must verify that adequate funding is in place behind the trust. Either problem could delay your cryopreservation, and for this reason there are those who dislike this method of funding.

Trusts are investment efficient, but as their name says they are revocable and therefore subject to the aforementioned risks. Also investments can go down as well as up. A young person can start one of these and after a while pay so much a year into a prepayment fund with CI. If planned carefully using annual tax allowances, this can be done without paying gains taxes and still leave substantial sums of money in the investment pot. The owner of the investments is usually the trustee, therefore there are no additional charges and fees. The assets are taxed as part of the owner's assets. There are no additional taxes of any sort, although if there was a large additional estate not being bequeathed to the Cryonics Institute it may be depleted slightly by having to pay death taxes on the value of the trust.

Transfer on Death Accounts

People who want to receive the income and investment gains from their funds can have a "Transfer on Death" (TOD), also known as "Pay on Death" account which in most states can avoid the delays, uncertainties and possible injustices of probate. However, these transfer on death accounts would not be immune from the attentions of a Receiver and if CI must verify that adequate funding is in the TOD account there could be delays. If a TOD account is established with an investment agent or broker with which CI has an established relationship and adequate funding is in the account, there would be no delays.

Prepayment

The Cryonics Institute will accept prepayment for a cryopreservation. It is easy to get credit these days, and a member without the cash to hand could borrow the money, make a prepayment and the pay off the loan using periodic payments as an alternative to life insurance if he isn't insurable. If he dies before finishing the loan, it becomes a debit on his estate and does not affect the payment to CI unless the estate is bankrupt. In the latter case a Receiver may be able to get the money back from CI. In cases where there are other beneficiaries and the estate is large enough to be subject to death taxes, there are a few situations where the debit on the estate can actually increase the payments they get.

An alternative method for elderly people with more than the bare minimum for a cryopreservation is to split their funds between a prepayment and buying themselves an annuity. This is a reverse life insurance policy where the policyholder gives the life company a capital sum. The life company pays out a periodic income until the policyholder dies, and then it keeps the capital. The older you are when proposing the policy, the greater the income you can get. Unlike life insurance, the sicker you are the more money you get. The enhanced income from the annuity replaces the lost income on the sum prepaid.

[To prevent anyone asking: The cost of meeting the financial regulations would be excessive in proportion to the volume of business CI would get if it offered annuities or life insurance itself. The definition of "Life Insurance" in law is very broad and would encompass any possible scheme that people can think up.]

Prepayment to a third party

An alternative would be irrevocable prepayment to a third party, such as a trust organised by an attorney or another life extension type organisation. This organisation would have to be trusted to hand the funds over to CI when the person needs cryopreservation. It is not possible for CI to offer an irrevocable prepayment plan itself.

This has disadvantages in that the third party may charge substantial fees, and the client is taking on the risk of the financial stability of the third party. However assuming that these problems are not thought serious, then it would be totally safe from a Receiver. It also has the disadvantage that the member is totally cut off from their money, as with other methods that are safe from Receivers.

A further disadvantage is that CI has no preferred list of acceptable third parties with whom it has already negotiated, and does not recommend attorneys as they are unlikely to pay out without lots of prevarication whilst they make absolutely sure that they are safe so to do. For this reason this method is only really recommended to people who have funded by another method and want, and can afford, a backup.

Conclusion

Nothing is perfectly safe, but as CI offers many funding options each prospective member can chose what suits his own circumstances best. If you have a lot of money, and plan to overfund your cryopreservation, it may be best to arrange it by two or more quite different methods. Do not be put off because of possible risks - in reality CI has rarely experienced situations where any of these potential situations have prevented funding.

Give us a call, or send an email. Getting properly funded may be easier than you think.

To browse all of the Cryonics Institute contracts, go to the Cryonics Institute Paperwork section of the Cryonics Institute Website Site Contents page.

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