Only about 62% of Americans have life insurance. Yet, about 82% of Americans believe that life insurance coverage is a vital thing to attain. Such discrepancies are a part of human nature. There is a large disconnect between what we should do and what we actually do. Most people don’t want to confront their own mortality. When you buy life insurance coverage, you are accepting that you will die one day and that you need to look out for the needs of your loved ones.
Put simply, the older that you are, the more expensive it is to acquire life insurance coverage. Also, once you obtain life insurance coverage you need to maintain your health. The longer you live, the more that your coverage accrues value. Life insurance is big business as companies expose themselves to financial risk. Once a policy holder dies, the life insurance company must pay beneficiaries for years or decades.
In a bid to lower risk, and update how actuarial statistics are taken, one life insurance company is changing the traditional rules of life insurance. John Hancock, a 156-year-old American insurance company, is offering its policyholder added benefits if they stay healthy and wear fit trackers. In exchange for sharing fitness data with John Hancock, policyholders can earn discounts, gifts and gadgets.
Fitness Trackers
John Hancock wants policy holders to get in the habit of exercising, staying healthy and wearing fit trackers. Fit trackers are a kind of digital monitoring device that records the vital data of a human being. A fit tracker can record your heart beat rate, the distance you walk or run, how many calories you consume and how much you sleep, for example. Fit trackers are sort of like a digital health and fitness diary.
The information stored on a fitness tracker can help you assess how healthy you are and what you need to do to get healthier. Such information would be very valuable to John Hancock. As previously mentioned, life insurance policies are based on statistics calculating how healthy someone is and when they may probably die. Fitness tracker information and statistics can help John Hancock customize their actuary statistics for each and every policyholder.
Moreover, such fitness related data can help John Hancock differentiate between healthy and high-risk life insurance applicants and policyholders. The fitness data of a policyholder can help the life insurance company significantly decrease their financial risk as well. Projections of when a policyholder will die will also become a lot more accurate than ever before.
The Fit Tracker Policy
John Hancock has reimagined its life insurance policies to be more focused on encouraging healthy lifestyles. The John Hancock Vitality Life Insurance initiative offers a two-tier incentive program for policyholders who stay healthy, wear fit tracker devices and regularly share the information with the company. Vitality is a health-centric insurance policy incentive that has been a John Hancock policy option since 2015. However, now the insurance company is incorporating the Vitality initiative into all of its policies.
There are two kinds of health monitoring polices called Vitality Go and Vitality Plus. Vitality Go doesn’t cost any money to acquire. Fitness data is tracked and if it improves, the policyholder gets incentives like discounts for fitness devices, Amazon and health related periodicals. Vitality Plus adds $2-a-month to existing premiums. Incentives include a 15% decrease in annual premium payments, health device discounts and up to $600 in savings for health food purchases.
The Future of Life Insurance
How fit tracker information will be shared has not been revealed yet. John Hancock representatives say that those who join Vitality will live 21 years longer. Also, policyholder will see a 30% decrease in hospital costs. If successful, John Hancock may inspire other life insurance companies to follow suit, changing how life insurance policies are approved forever.
Ross Quade is the owner of Final Expense Insurance .com where he frequently writes about life insurance related issues. He been an Insurance Agent for more than a decade.
