It’s a New Year, a time when many of us have resolved to live healthier lives and to get in shape. While we may start the New Year with the best of intentions, sometimes our health goals fade as the seasons wear on.
Luckily, technology now provides us with tools that can help make our health goals both achievable and fun. Even better, not only can we use of some of these fitness tracking apps to help get fit, some of them can help reduce life insurance costs.
While there already exist apps that monitor your driving patterns to help reduce your auto insurance cost, could life insurance be the next in line for a similar disruption?
In the United States, the 157-year-old company John Hancock has taken the bold move of offering only Interactive Policies. Interactive policies are those that rely on health data collected by an external device – for instance, a Fitbit or Apple Watch – in order to determine insurance premiums. But how do these policies work? And what are the possible benefits and drawbacks of such policies? Let’s take a look.
Fitness Tracking Apps for Your Health
Common sense dictates that if you live a healthy lifestyle, in general, you’ll pay a lower life insurance premium. Presently, there are various apps and devices that help keep track and monitor your health status – some even offering rewards for achieving health goals. Popular apps such as Nike+ and Volt allow users to set daily health goals, have a personalized “coaching” program, and keep track of health status over time.
Another app, Canada’s own Carrot Rewards, offers rewards points to users who meet pre-determined targets. Combining these apps with a mobile health device, such as a Fitbit or Apple Watch, allows individuals to keep on track with their personal lifestyle goals.
mHealth and Life Insurance
mHealth, or mobile health, refers to the general use of mobile devices in medical care. While using mHealth tech for life insurance is available in other countries, it’s only now starting to roll out in Canada.
Optimity, a Toronto based company, has developed a platform that allows users to “gamify” their health goals – competitions against colleagues and points earned you can redeem gift cards. Their corporate wellness programs will provide insurance companies with the opportunity to use the collected data to track the lifestyle habits of its users.
Similarly, Vitality Group is a technology company that has developed a program to encourage healthy living among its users. Vitality creates personalized programs to help individuals improve their fitness level and lead healthier lives. The company uses data recorded on mHealth devices to create a customized program for the individual user.
On first glance, this feature may seem comparable to what other apps and devices offer, but Vitality takes the use of the collected data one step further. By partnering with insurance providers, Vitality uses information it collects to lower individual insurance rates based on how healthy of a lifestyle the user leads and improvements the user makes. But is this the best way to get the cheapest life insurance in Canada?
How Vitality and mHealth Work
By participating in activities, users can lower (or raise) their “Vitality Age,” that is, an age based on your overall health. To incentivize users to remain active, Vitality sets goals to better a users health, and when certain achievements are completed, the user will receive points. These points – which can also be obtained by completing questionnaires and other activities – can then be redeemed for various rewards like GoodLife Fitness and Amazon.ca.
In terms of life insurance, the more active and healthier lifestyle you lead will translate into a different level or status – anywhere from bronze (or base level), to platinum. Life insurance companies can then offer an adjusted premium based on your health level – the higher the level, the less you pay for insurance. Additionally, your base rate can never be raised, but rather can only lower based on your activity.
Presently, the Vitality program is available through Manulife Insurance in Canada, but it’s only a matter of time before other providers offer the same or similar programs.
Manulife’s Family Term with Vitality plan offers a guaranteed maximum and minimum rate, so customers know that even if they don’t meet targets, they will not have to pay more for their insurance than their base rate.
As an incentive to join, Manulife Vitality members will receive a discount on an Apple Watch, which then can be paid off using Vitality points, to assist them in reaching their health targets. The term offered by Manulife is for 10 or 20 years, renewable until you reach the age of 80, or a term ending at age 65 or 100. Like most insurance policies, there are optional add-ons available, such as serious injury or accidental death coverage.
Privacy and Your User Data
mHealth is a relatively new innovation, and understandably there are concerns about what information is collected and shared. Manulife Vitality states that the health information will only be collected and analyzed by Vitality, and individuals can select which information they wish to collect and share.
But as more users join, and more data is collected, the image of a healthy lifestyle could change, and therefore benefits of being involved in an mHealth program could evolve.
In a hypothetical situation, a policy offers Bronze level coverage to members who obtain 0 points and Silver level to those that reach 1000. But as more members join, the company could realize that more people are reaching Silver level status than anticipated and adjust the points level to 1500 points. In a hypothetical situation like this, does everyone get healthier? Or would the changes prove discouraging, making users give up more easily and therefore pay higher rates? And is it worth sharing our data when health objectives will only prove harder to meet and maintain as we age? Arguably, ageing itself could factor into your life insurance quotes. Let’s say you look like you’re ageing faster than your friends and colleagues. If so, it’s possible you’re not a very good insurance risk. You may pay more or be denied coverage.
Another concern is that data can be skewed, as it does not take into account the challenges faced by individuals with physical challenges, and those who are unable to participate in the expected challenges. Those unable to complete the challenges might never be able to attain a higher status than they began with, therefore never receiving any of the benefits that such points-driven programs offer – despite still leading a healthy lifestyle.
The ability to track your health and fitness has never been easier, and there’s a clear benefit to using an mHealth device. Being able to use this information to lower your insurance rate has a certain appeal, but one needs to consider if the programs offered are right for you, and what amount of personal data they’re willing to give up in order to participate in such a program. If you’re interested in participating in a program like Manulife Vitality, consider comparing life insurance quotes to make sure you’re getting the best benefit for your dollar.
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PHOTO BY: BRUNO NASCIMENTO