Carrier Ties Life Insurance Premiums To Lifestyle Habits

By Arthur Postal InsuranceNewsNet

WASHINGTON – Will policyholders be willing to let their life insurance company keep tabs on their lifestyle habits and health information in return for discounted premiums?

That is what John Hancock is betting on as it offers new products that will allow policyholders to reduce their premium costs in return for providing the company with ongoing data regarding their lifestyle habits and key medical information.

John Hancock announced it is offering two life insurance products that it says are the first such products in the U.S. linked with a healthy living program. The products are Protection UL, a universal life insurance product, and John Hancock Term, a term life insurance product.

The company says the new products offer potential for savings on annual premiums, as well as discounts and rewards from leading retailers to encourage policyholders to take small steps to improve their health.

New policyholders will receive a free Fitbit device to help track their progress. Vitality, a global firm that is its partner in developing and offering the product, will keep track of the policyholder’s exercise and other activities. John Hancock says policyholders will receive personalized health goals. The policyholders then can use the device to log their activities using online and automated tools integrated with personal health technology.

Vitality is a global wellness company that has established similar programs with businesses and health insurance companies in the U.S. The company is based in South Africa, where insurers offer a similar policy. Similar products also are offered in Europe, Singapore and Australia.

Under the new program, applicants provide detailed data on such medical information as their cholesterol levels, blood pressure and medical history. New policyholders are required to take an online “Vitality Health Review” to determine their Vitality Age, which John Hancock and Vitality said is “an indicator of overall health that may be higher or lower than their actual age, which can improve over time as they work toward living a healthier life.”

John Hancock said the review is based on a Vitality study that determined that, on average, most Americans are five years older than their actual age, based on various health and wellness factors.

Under the plan, new policyholders immediately begin accumulating "Vitality Points” after their policy is issued and when they complete health-related activities like exercising, getting an annual health screening or even obtaining a flu shot.

The number of Vitality Points a policyholder earns over the course of a year determines their program status level, John Hancock said.

For example, a 45-year-old couple (of average health) buying $500,000 each in Protection UL coverage potentially could save more than $25,000 on their premiums by the time they reach age 85, with additional savings if they live longer, assuming they reach gold status each year.

“The healthier their lifestyle, the more points they can accumulate to earn valuable travel, shopping and entertainment-related rewards and discounts from leading retailers,” the firm said. Additionally, depending on the type of product they purchase, a policyholder could save as much as 15 percent off their annual premium. John Hancock officials said.

“We want to make life insurance more immediate and relevant in the daily lives of our policyholders and help them connect their financial well-being to their long-term health," said Michael Doughty, John Hancock president.

"The latest advancements in wearable technology are encouraging people to take a more active role in their health, and it's time we applied these innovations to create 'smart life insurance' and recognize and financially reward consumers for their positive actions," he added.

John Hancock said the universal life policy has been approved for sale in 30 states and the term life policy in 20 states.

InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].

InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].