I was offered life insurance and thought I need input from LessWrong people before I accept or decline the offer.
Please share your personal experience, if any, with me.
Thoughts that have occurred to me:
What are the odds that that company will be around in 38 years? I mean, both World Wars fit in that time span.
What is the probability distribution over how much the Euro will have inflated by then? Does that even matter?
There's no way I would spend 5% of my income on life/disability insurance. (I'm an actuary, BTW.) Start with what you and your dependents would need in the event of your death or disability, rather than starting with the policy details. Also, try to objectively estimate the probability of your (early) death or disability. Then, shop around - do not take the first thing offered to you.
I have no dependents.
How do I estimate the probability of early death or disability?
What other multinational life insurance companies are there?
I advise to talk to specialists.
Are you interested in life insurance for the purpose of funding cryonics suspension? (given that you have no dependents, I can't imagine any other reasonable purpose).
Then the reasonable thing to do, I suppose is to ask for advice from:
Cryonics organizations of the world. They are exactly three: Alcor (http://en.wikipedia.org/wiki/Alcor_Life_Extension_Foundation), Cryonics Institute (http://en.wikipedia.org/wiki/Cryonics_Institute) and KrioRus (http://en.wikipedia.org/wiki/KrioRus)
Insurance agents that specialize on insurance for cryonics. I know of only Rudi Hoffman (http://www.rudihoffman.com/cryonics.html).
At least that's what I'm going to do. As I don't have any experience to share, I can share my questions regarding the financial and organizational side of things, that bother me:
How can I make sure that insurance contract will go uninterrupted? As I understand, it is in insurance company's best interest to collect insurance premium(contribution) for those years while I'm still healthy and unlikely to die and make it so that the contract is not renewed afterwards.
How can insurance scheme possibly work? With the figures you quote your income over 38 years will be 9880€; if invested with 3% rate (per nick012000's calculations) it becomes 20192€; practically the same amount that they will have to pay to you. The insurance company hardly breaks even in the best case, but on average - taking into account that some clients die or get crippled prematurely - and that it has its operational costs - it is at a loss.
How can it be? It can't! My hypotheses are:
a) Insurance companies (http://www.google.com/search?q=%22i+didn%27t+get+rich+by+writing+a+lot+of+checks%22) don't get rich by writing a lot of checks. Their business model is founded on not fulfilling their contracts somehow; by the way of my point 1, or others.
b) I don't understand the working of insurance on a basic level.
Using this: http://www.moneychimp.com/calculator/compound_interest_calculator.htm , I calculated that with a yearly input of $260, a per-annum interest rate of 3%, and 40 years of deposits, you'll have $20,192.46 by the time you're in your sixties. With an interest rate of 4%, you'll have $25,694.90.