# Running the numbers: Cryo vs Discount rate

The following is authored by Colby Davis. I am posting for him because he doesn’t have an account with any karma. Someone recently requested numbers on cryo preservation costs. I’ll note that my own opinion is that for young people unlikely to die investing money in research is a better bet than investing directly in your own preservation.

Here is the link for the spreadsheet. Either download it or create a copy for yourself to edit.

Hey rationalists, here’s the spreadsheet I presented the other night. For those who weren’t there but are interested, this is a tool I designed to break down the costs associated with signing up for cryonics under different methods of financing it. Here are some instructions for using it.

Column B is where the user puts all the inputs: age, sex, probability you think that if you are frozen you will someday be successfully revived, and discount rate (for those unfamiliar with the term, this is like the reverse of an interest rate, the rate at which cash flows become less valuable to you as they extend further out into the future).

Column D is the probability that you will die in the next 20 years (the typical term for a term life insurance policy). It is calculated based on the “life table” sheet, which i stole from a government actuarial table online.

Column E is your current life expectancy, the number of additional years you have a roughly 50% chance of surviving through.

Column F is how much the monthly fee for a 20 year, $100,000 life insurance policy would cost you, assuming “exceptional” health, as determined by the top result at http://www.term4sale.com/

Column G is the present value of that policy, using your discount rate. This means that you should be indifferent between paying this amount right now and paying the figure in column F every month for the next 20 years.

Column H is the probability that you will die within the next 20 years AND sometime thereafter be successfully revived from cryogenic suspension, making the heroic assumption that your probability belief in column B is true.

Column I is simply the dollar present value amount spent per 1 percentage point reduction in (permanent) death. This is the value you want to consider most when deciding whether to sign up or not.

The next columns consider the alternative means of paying for a cryonics policy, saving up and investing in the stock market until you have enough money to pay for it outright.

Column K gives the future value after 20 years of investing the amount you would have spent on an insurance policy in the stock market instead, as well as the present value of that figure to you now, discounted back at the rate you gave. (This is not necessarily pertinent to the cryonics decision but is provided for comparison)

Column L is the amount you would have to invest monthly to have an expected future value of $100,000 by the end of your life expectancy.

Column M is the present value of foregoing that monthly amount for the rest of your life expectancy.

Column N is the probability you will die after you life expectancy (50%) AND be successfully revived assuming yours p-value.

And finally column O is the same measure as in Column I, using this alternative plan. A lower value in one column or the other (most of you will find column O to be the lesser value) means that you can reduce your probability of permanent death cheaper (or, reduce your probability of death by a greater amount for the same dollar amount) by pursuing the cheaper strategy.

Hope you enjoy!

- Colby

P.S.

There was a discussion at the meeting about whether the figure in column N was too high because it failed to account for the probability that poor stock market performance may leave you without enough money to afford the cost of cryonics. I believe this is false because since long-run stock returns distributions and life expectancies are approximately normally distributed and independent of one another, the chance that you will die late with a poor return (thus unable to freeze your head) is almost perfectly offset by the chance that you will die early with a great return (thus still able to freeze your head). So it’s not that the mean is too high, but merely that there is a variance around it. I was trying to figure out how to work this into the spreadsheet but figured the uncertainty of our beliefs about cryonics was much more a confounding factor here than the probability distribution of possible stock-returns-time-paths.

I’d say readers of Less Wrong are at least a standard deviation better off in life expectancy then what you get by just looking at age and sex (consider zip codes, income, race, substance abuse, risk-seeking etc.)

Do you have a source for long-run stock market returns being normally distributed? At least in the short term, they have positive excess kurtosis and negative skew.

I believe it’s an assumption of a lot of models. I’ll ask.