To prospective members of CI in the UK:
Our attorneys, in consultation with UK solicitors experienced in insurance law, have completed our review of the possible risks in accepting UK life assurance (life insurance) policies as funding for a CI contract. We are glad to say that we are prepared to continue to accept UK insurance as adequate proof of payment.
I won't go into all the details, but the gist is as follows. In the UK, as in the US, a beneficiary must have an "insurable interest" in the life of the insured. If the beneficiary is a corporation, the generally recognized types of insurable interest include the case where the insured owes a debt to the beneficiary, or the case where the insured is an important employee of the beneficiary.
In our case, there is only a "contingent debt," since the debt is not actually incurred under our contract until death of the insured. The contingency is only one of time, not of uncertainty, but whenever there is any vagueness in the law there is always a chance that a court might rule based on political or ideological considerations, and a judge hostile to cryonics might rule based on that hostility. Under the UK law (two centuries old, and intended to discourage gambling or fraud), the insurable interest requirement is broader than in the US.
Incidentally, we understand that relatives cannot challenge under the statute nor benefit from nonpayment to CI; and if the company pays, no one can then force a return of the payment. It is theoretically possible for the company to understand the situation, promise to honor CI's status as beneficiary, and still later refuse to pay by claiming lack of insurable interest.
The bottom line is that we believe the risk of nonpayment by the insurance company is small but not negligible. Consideration of this issue convinced us to make a small change in our standard contract, to clarify what we believe to be already set forth therein.
The contract already provides that CI must be satisfied with the funding arrangements, and that the patient or patient's estate is responsible for payment. But our change in language will make this clearer. (The new wording--for members or prospective members who have not yet executed a contract--should be on our web site in the next day or two. Those with contracts already executed do not need to do anything.)
Again, this will apply to the standard contract and all new members, not just in the UK. Thus, if it were to appear that insurers in a particular jurisdiction would not honor the designation of CI as beneficiary, then CI could decide that--in that jurisdiction, UK or elsewhere--life insurance is not acceptable, and notify affected members accordingly. At present, we have no reason to do so.
We will continue to seek out insurance companies and agents who will offer the best and most convenient service.
Addendum June 2001
For those planning to fund CI suspensions through UK life insurance, using a deed of trust to name CI as beneficiary (or as the new beneficiary), we recommend also naming CI as the trustee, to minimize risk.
Robert Ettinger Cryonics Institute
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