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When Pat Lilja's son was born in March 2000, he and his wife Laura took out what he calls an "insurance policy that works." But supplementary benefits through their HMO is not what he's referring to.

Moments after Benjamin Lilja was delivered, instead of routinely discarding the umbilical cord, labor nurses inserted three syringes into the cord and extracted approximately 50 cc's of blood. Later, the Liljas shipped the syringes with the cord blood to a private company, which would store it in frozen form at the University of Arizona.

Their biological insurance lay in the form of stem cells, immature cells which have the potential to develop into other types of cells such as muscle or bone. These are found in cord blood and have attracted the attention of researchers as a lifesaving resource for transplantation in patients with leukemia and other conditions.

Should Benjamin ever fall victim to those ailments, the Liljas hope the stored stem cells will be waiting for him, avoiding a protracted search for a suitable donor.

The procedure "went without a hitch," Lilja tells WebMD. "It's a little bit of extra peace of mind. There is growing list of diseases that are potentially treatable with stem cells."

Procedure Simple -- But Storage Can Get Costly

Interest in cord blood as a source of stem cells and as an alternative to bone marrow transplants is expanding -- for various reasons.

Matching the donor to the recipient does not have to be quite as precise when using cord blood as it does when using bone marrow, so the chances of finding a suitable donor are increased. And because of the immaturity of stem cells in cord blood, patients are less prone to "graft vs. host" disease -- a common occurrence when the recipient rejects transplanted blood cells, experts say.

And, of course, if the cells are reintroduced into the same person they came from, there's no chance of rejection.

Consequently, banking of cord blood by expectant parents is on the rise. Michelle Linn, of Boylston, Mass., chose to bank her son Ryan's blood because his father is adopted.

"We don't know anything about his medical history," she tells WebMD about her husband. "We've tried without success to obtain information but don't know any of his blood relatives. It seemed like a simple thing to do that could give significant benefit."

But banking cord blood through private companies can be costly. The Liljas used Cord Blood Registry (CBR), in San Bruno, Calif., who charge a first-time fee of $1,250 and then an annual storage charge of $95.

David Harris, PhD, director of CBR's cord blood bank, says storing cord blood is a wise investment when you consider the inevitability of future advances in stem cell research.

"Today we can use stem cells for blood cancers, some solid tumors, and genetic diseases," he says. "But what will we be able to use it for in the future? Gene therapy will expand, and tissue engineering is going to explode. Though I might not get cancer, when I consider all these future possibilities, the likelihood [of needing stem cells] might go up several hundred times. And when you amortize the costs, it's insignificant."