Changing What It Means To Own Life Insurance

BOSTON –The life insurance industry must engage customers in new and exciting ways. That’s going to require innovation using things like mobile and wearable technology, according to Brooks Tingle.

The percentage of people who own individual life insurance is declining. To turn that around, the industry, including advisors and agents, must change direction, he added.

Tingle, senior vice president for marketing and strategy at John Hancock Insurance, made these points during an interview with InsuranceNewsNet in advance of his morning presentation here today. He and Tal Gilbert of wellness program provider Vitality Group will co-lead a session on how to grow the life insurance business by rewarding insureds for healthy living.

Protection is not the only goal

“We need to view our roles differently,” Tingle said. “We are not just in the protection solution business. We need to take an active role in the lives of our customers, so we are no longer on the sidelines.” That will involve innovating around changes that engage and excite customers.

Too often, under the traditional life insurance business model, people who buy a life policy never hear from the company other than the once-a-year privacy notice, the executive said. He described that as “the least engaging experience” one can imagine.

The industry must be more involved in the lives of its customers, he said.

The suggestion he made is for life carriers to partner with customers in ways that support customer efforts to improve their day-to-day healthy living.

One example of this is the program that Hancock debuted in April in partnership with the Vitality Group. Called the John Hancock Vitality Program, it provides coaching, education, incentives, rewards and premium discounts to Hancock life insurance policyholders who take steps to live healthier lives.

The program also provides its “members” with a free activity tracking device, a Fitbit. Participants can wear Fitbit on their wrists to record steps walked, stairs climbed, sleep quality and other measures of health-enhancing activity.

There is a gamification aspect, too. Here, participants can qualify to spin a “vitality wheel” up to once a month. They will receive the reward shown when the spinning stops. A reward might be a gift card for Starbucks, for instance.

Customers don’t have to participate in the program, he said. And if they do participate, they don’t have to pay any fees for the program. Instead, it’s the other way around: Those who own a Hancock life policy with a Vitality program option can earn an age-based premium discount of 10 to 15 percent, Tingle said.

To qualify for the savings, the policyowner earns points for such things as tracked physical activities, annual visits to the doctor, etc. The points determine a participant’s “status,” and this drives what the person can earn by way of premium discount and rewards for things such as travel, entertainment, shopping and fitness.

“The healthier your lifestyle, the more you can save — and the greater your potential rewards,” Hancock says on its website.

Dynamic, engaging

“This changes what it means to own life insurance,” Tingle said in the interview. It is a “dynamic, exciting engagement model” for the business.

It puts the focus on healthy living, nutrition and getting rewarded for positive steps taken.

The life insurance industry is a natural partner with customers for programs like this, Tingle maintained, noting the program combines actuarial science and behavioral science to support healthy living.

“This is a completely different experience” than what the traditional life insurance approach offers to customers, and people like it, he added.

During its first six months, the program received a “tremendous response,” Tingle said, noting that “we already have several hundred members.”

As for advisors, “they say it has completely changed their conversations with clients. Now they’re talking with client about healthy living, not just dying.”

Another outcome he has noticed: “We are viewing ourselves differently. We’re not just providing protection. We are also taking an active role in the lives of our customers.”

The Hancock program is approved in most states. It is available with several types of life polices including term, current assumption universal life and indexed universal life, either as an integrated policy feature (on term) or as a rider (on the universal life contracts).

Although currently available only on newly issued policies, this could expand. Demand is growing to make the program available to existing life policyholders as well, Tingle said, and “we’re exploring that.”

InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at [email protected].

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