Paul Sanchez
The Apollo 11 crew, including Neil Armstrong, Buzz Aldrin, and Michael Collins, famously struggled to get life insurance before their historic mission to the moon. The astronauts were federal employees with modest salaries, and the insurers deemed the mission too risky. To solve this problem, the crew autographed hundreds of postal envelopes (known as covers) during their pre-launch quarantine. These autographs were left with a trusted friend, who distributed them to the astronauts' families in the event of their deaths. The idea was that the autographs would soar in value if the crew did not return, thus providing financial security for their loved ones. This pseudo-insurance system continued until Apollo 16, and the autographs later appeared at auctions, selling for tens of thousands of dollars.
| Characteristics | Values |
|---|---|
| Difficulty in getting life insurance | Life insurance companies refused to provide coverage for astronauts due to the high risk of their missions. |
| High cost of insurance | Life insurance for astronauts embarking on dangerous missions was extremely expensive. |
| Alternative insurance methods | Astronauts devised strategies, such as signing autographs and postal covers, to create valuable memorabilia that could be sold by their families in the event of their death. |
| Role of NASA and space agencies | NASA was barred by law from providing insurance but often compensated families after fatal missions. Space agencies sometimes arranged insurance for astronauts, typically valued at $2-3 million. |
| Publicity and sponsorship | Some insurance companies offered free insurance to astronauts in exchange for publicity, with premiums paid by sponsors. |
What You'll Learn
Apollo 11 astronauts' self-insurance plan
The Apollo 11 astronauts struggled to get life insurance, so they came up with their own self-insurance plan. Neil Armstrong, the first man on the moon, estimated that the Apollo 11 mission only had a 50% chance of a successful landing. Despite this, he reckoned his chance of a safe return was much higher. However, few life insurers were willing to offer a low enough rate for the astronauts to afford. NASA was also barred by law from taking out insurance for the crew.
Some insurance companies offered to insure the crew for free, but they wanted the publicity in return. For example, the Travellers' Insurance Company, based in Hartford, Connecticut, offered to insure the Apollo 11 astronauts, with premiums paid by the Austral Oil Company and the Cullen Central Bank. This offer was politely declined.
As a workaround, the astronauts signed hundreds of postal covers before their mission. These covers were printed to commemorate the lunar mission and were left in the care of a trusted colleague. The idea was that if the astronauts did not return, these signed covers would become highly valuable and could be sold to benefit their families. This pseudo-insurance system continued until Apollo 16, the penultimate Moon mission.
The self-insurance plan turned out to be unnecessary, as the Apollo 11 crew returned safely to Earth. Some of the signed covers began to appear at auction from the 1990s, selling for around $20,000 to $46,000.
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The US government's role in Apollo 11 insurance
The US government played a significant role in ensuring the financial security of the families of the Apollo 11 astronauts. At the time, the Apollo 11 crew members were federal employees earning a modest salary, which left little room for life insurance premiums. Moreover, the risky nature of their mission made it challenging to obtain affordable life insurance coverage.
US regulations prohibited NASA from providing life insurance for astronauts using their budget. However, the US government encouraged the crew to find creative ways to provide for their families in the event of their demise. This led to the idea of "insurance covers" or "postal covers".
During the month before the launch, the astronauts, including Neil Armstrong, Michael Collins, and Buzz Aldrin, signed hundreds of autographs on small white postcards or the exterior of letters and packages. These "insurance covers" were left with a trusted colleague and distributed to their families if the mission ended in tragedy. The expectation was that, in the unfortunate event of their death, the value of these autographs would increase significantly, providing financial support for their loved ones.
While the astronauts safely returned to Earth, their innovative approach to insurance left a lasting impact. Today, these signed "insurance covers" are highly valued by collectors and can sell for tens of thousands of dollars.
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The postal covers as pseudo-insurance
The postal covers were limited edition, printed by MSCSC Covers and Bishop Covers to commemorate the lunar missions. The astronauts' signatures added value to these covers, and in the event of a failed mission, their families could sell them at a higher price. This pseudo-insurance system continued until Apollo 16, with some astronauts also leaving behind single-signed covers for their families.
The process of creating these postal covers involved the astronauts signing them while in quarantine before the launch. A trusted ally would then cancel the covers at the Kennedy Space Center (KSC) post office on the day of the launch and/or lunar landing. The covers were designated to this trusted person, ensuring they remained secure until the mission's completion.
The Apollo 11 insurance covers usually fetch the highest prices due to their historical significance as the first lunar landing mission. The covers from this mission have been known to sell for prices ranging from $20,000 to $46,000 at auctions starting in the 1990s.
The use of postal covers as pseudo-insurance showcases the ingenuity and determination of the astronauts to provide for their families in the face of the challenges posed by the lack of traditional life insurance options. It also highlights the unique risks and considerations associated with space exploration, which continue to evolve as space tourism and commercial space flights gain traction.
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NASA's unwritten agreement to compensate families
NASA has an unwritten agreement to compensate the families of astronauts in the event of their death. This was tested when the Space Shuttle STS-51L Challenger blew up during its launch in January 1986. Seven astronauts were aboard and only one, Christa McAuliffe, had proper life insurance. The failed launch actually did carry some insurance but this was more of a manufacturers' incentives policy for Morton Thiokol – although the money was, in effect, later used to compensate the families of the crew. While the crew, prior to their launch, had waived NASA's liability in the event of an accident, once it happened, both NASA and Morton Thiokol did the decent thing and reportedly made compensation payments to the families of astronauts Scobee, Onizuka, Jarvis and McCauliffe. This was reportedly worth US$7.7 million as tax-free annuities plus some unspecified extra cash settlements. The relatives of the other astronauts, as well as Jarvis's father, reached separate undisclosed settlements with Morten Thiokol believed to be of the order of US$2 million each.
For the fatal re-entry failure of the Space Shuttle STS-107 Colombia in February 2001, again there was no official insurance claim for the seven astronauts aboard as none were insured, despite requests from two crew members that NASA should arrange this. In the end, NASA made a compensation payout to the astronauts' families totalling US$26.6 million, in addition to the military crew families receiving their standard in-service death compensation of US$250,000 each.
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The future of space tourism insurance
The future of space tourism is becoming more accessible to the public, with companies like SpaceX, Blue Origin, and Virgin Galactic at the forefront. As space travel becomes more achievable, new challenges arise, including the need for insurance to support this burgeoning industry. Space travel, like any high-risk endeavour, requires a comprehensive framework for risk mitigation, and insurance will be pivotal in ensuring the safety and financial viability of space exploration.
The insurance industry will need to adapt to provide coverage for risks that are unique to space travel. The potential hazards extend beyond rocket launches and re-entry; as more individuals venture into space, there will be growing concerns around health, liability, property, and life insurance.
Risk Assessment and Underwriting
The immediate challenge for insurers is to assess the risks accurately. Traditional underwriting models are insufficient for evaluating the unique risks of space travel. Insurers must develop specialised expertise and collaborate with aerospace engineers, medical professionals, and space tourism companies to design insurance products that provide adequate coverage without becoming prohibitively expensive.
Comprehensive Passenger Coverage
Space tourism insurance will need to be comprehensive, covering everything from pre-flight health screenings to post-flight recovery. This coverage will likely resemble travel insurance with added layers to account for space-specific risks, including accidental death and dismemberment, medical coverage for space-specific ailments, and trip cancellation due to weather, technical issues, or health concerns.
Liability Coverage for Space Tourism Companies
Space tourism operators will require robust liability coverage to protect themselves from potential lawsuits in the event of accidents or mishaps. These policies must address various scenarios, including damage to spacecraft, injuries or deaths of passengers, and liability for damages to third-party property or other spacecraft.
Property Insurance for Spacecraft
Spacecraft are highly expensive and technologically advanced, so insuring them is a priority. Property insurance must cover a wide range of potential damages, from launch pad accidents to damage during spaceflight or re-entry. Insurers will need to account for space debris impacts, malfunctions caused by extreme conditions, and other unforeseen challenges.
Partnerships and Regulatory Support
To ensure the viability of space tourism insurance, insurers must partner with government agencies, aerospace firms, and space tourism companies. Regulatory bodies will play a critical role in establishing safety standards and protocols, providing a framework for insurers to design their coverage. Additionally, partnerships between insurers and space tourism companies could help reduce premiums by implementing safer spacecraft designs, rigorous safety protocols, and more reliable launch systems.
The Evolution of Space Tourism Insurance
As space tourism evolves, so too will the insurance coverage models. Future policies may include options for extended stays in space hotels or lunar exploration trips. Space tourism insurance may even become a standard part of travel insurance packages, much like air travel insurance today. Over time, as technology improves and space travel becomes more routine, insurance premiums may decrease, making space tourism more accessible to a wider audience.
However, this positive outlook depends on the successful collaboration between insurers, space companies, and regulatory bodies to effectively mitigate risks and enhance safety. The development of a viable and affordable insurance regime for future space tourists is critical to addressing risk management issues and ensuring the sustainable growth of the space tourism industry.
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Frequently asked questions
The Apollo 11 crew struggled to get life insurance as few insurers were willing to offer a low enough rate for them to afford it. However, they did not fly without insurance. The Travellers' Insurance Company offered to insure the crew, with the premiums paid for by the Austral Oil Company and the Cullen Central Bank.
Life insurance companies refused to provide coverage for the astronauts because of the high risk of their missions.
The astronauts autographed hundreds of postal covers before their mission, which they left in the care of a trusted colleague. They knew that their autographs were in demand and that if they did not return, these covers would be valuable and could be sold to provide for their families.
The postal covers were eventually sold at auction, with some selling for $20,000 to $46,000.
It is unclear whether modern astronauts have life insurance. Some reports suggest that most professional astronauts go on missions without formal insurance cover. However, it is known that some astronauts have taken out insurance in the past, usually arranged by their respective space agencies and usually to a value of $2-3 million.
