The Great Kidney Caper: Can You Insure Your Individual Body Parts?

What do a Newark, N.J.-based mortician, a California-based businessman and a dentist and his seven mortician-cronies from the East Coast all have in common? They’ve all raided funeral homes and medical facilities for body parts, engaging in multi-million dollar schemes to sell them on the body part black market. But this epidemic is nothing new, and its morbid presence can be seen in gruesome news stories from across the globe.

The World Health Organization has estimated that one-fifth of the 70,000 kidneys transplanted globally each year are from the black market.

Both hardened criminals and corrupt professionals partake in this scheme, greedy for the money the body parts fetch. According to various news sources, some tissue and limb samples could fetch up to $7,000 a piece. Based on this figure, one may assume they have a small fortune hidden in their bodies.

So how much is your body actually worth based on the sum of its chosen parts? In foreign countries like China and in South America, some people may value body parts more than the person’s life.

But missing body parts don’t only include great kidney capers and corpses with stolen parts. This can affect your life… by way of injuries that disable you and possibly deplete your income.

“Most of us have seen and heard of body part coverage,” says Mark Petersen, a partner of Petersen International Underwriters based in Valencia, Calif. Petersen International Underwriters provides customized disability insurance coverage for Lloyd’s of London.

“We’ve seen entertainers whose legs have been insured, an entertainer whose rear-end is insured, the smiles of famous people insured, the hands of great boxers insured, and more recently, a football player whose hair is insured… it’s the voices of singers, the taste buds of wine and tea connoisseurs.”

“If you put them all together and look at them carefully, you’ll see something in common: an entertainment attachment. The entertainment industry uses body part coverage as a promotional device and not as truly legitimate insurance.”

The major clue that this may not be “legitimate insurance” lies in the wording of the policy, which can be so restrictive that the chance of a payoff could be slim.

“One of my early intros to this type of coverage was an inquiry about insuring a boxer’s hands,” Petersen says, noting that this specific policy would have only paid out in the case of complete severance of both hands above the wrist.

But entertainers aren’t the only people who could be concerned with body part coverage. According to Petersen, it’s not uncommon for a skilled surgeon to seek coverage for his hands, which are directly related to their income and livelihood.

This is where disability insurance is important. Disability insurance covers your living expenses in the event you become disabled and cannot work. Short-term disability pays a percentage of your income if you are unable to work for three to six months. While a long-term disability policy pays a percentage of your income for two to five years.

“We do [offer specific body part coverage] and we’re happy to do that. But let’s break it down and look at it a little more carefully: If that surgeon got a bump on the head and his mind wasn’t thinking clearly, it would affect his work. Let’s take the same situation and make him a cancer victim, and it would affect his work,” Petersen says. “So when we approach body part coverage, we really try to spin it back to a full comprehensive disability insurance approach for this type of situation. The wording is more refined [than a publicity-driven policy], and can include arthritic conditions or loss of use. For instance, if he has mobility of his hands, but doesn’t have dexterity.”

And to the largest percentage of people who don’t happen to be entertainers or skilled surgeons and strictly want to protect themselves against the possible loss of a limb or body part, disability insurance is still important.

“If you just do a quick, simple calculation by multiplying income and the years before retirement age, you will come up with a very large number. That’s the capitalized value of an individual at work,” Petersen says. “This number doesn’t take inflation or income increase into consideration, but it is what a person would give up if they become disabled and can no longer work.”

Petersen also noted that while income does decrease when a disability affects employment, the expenses can also increase dramatically. Disability insurance can protect your lifestyle, as well as ensure continued support for your family.

Benefit amounts typically vary by the types of injury, product ranges, and the individual’s income.

“Like any policy, you get what you pay for,” Petersen says. “The benefits that are allowed by the underwriters are actually a reverse discrimination: If you took a $100,000 income-earner, they will probably get 65 percent of their income insured by the traditional marketplace, and they can maintain their lifestyle. However, if you took someone who has a $500,000 income, traditional underwriters place limits, and they may only be able to insure 50 percent of their income.”

In the latter instance, the lifestyle the person is accustomed to will not be met by the traditional disability benefits. Should disability insurance protect everyone’s lifestyle, or be a means to dropping people down to a different income level?

According to Petersen, disability coverage can actually be layered to protect the policyholder. While group and individual disability policies are most commonly prescribed to the public, the two may indeed be blended together. Sometimes the group coverage doesn’t cover a sufficient amount, or only covers base income.

In these situations, people may purchase individual policies to further protect themselves. However, it still may not offer sufficient coverage to those people who make more money or need stronger protection.

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