Life insurance has grown significantly in recent years, in part due to the coronavirus pandemic, with half of Americans now insured.
While life insurance has traditionally been viewed as a death benefit, providing financial security to families after the death of a loved one, parts of the industry are expanding into health benefits for the living.
This reflects a surge in demand, with industry group LIMRA saying one-third of consumers are interested in free mental health and wellness services that come with life insurance. Almost a quarter are also interested in gym memberships, health coaching and diet plans.
John Hancock has been leading the way for more than a decade. In 2015, we launched the Vitality program with the idea of encouraging healthy living. Discounts on fresh produce, wearable products, and a variety of health memberships are just some of the many offerings.
John Hancock CEO Brooks Tingle is honest about business incentives. Life insurance companies earn profits by investing their customers’ premiums. This means that the longer they live, the more profit the company can make.
“Helping our customers live longer, healthier and better lives is in our great interest,” John Hancock President and CEO Brooks Tingle said on a recent episode about Fierce Healthcare’s Podonosis. “The longer you collect premiums and invest that money before paying the death benefit, frankly, the more money you make.”
Life insurance companies know a lot about death and its causes. A process known as underwriting forms the basis of someone’s insurance premium. This process is robust and requires life insurance companies to review medical records and make decisions based on risk.
“Oftentimes, as underwriters, we know more about a customer’s health than their doctor because we see the big picture over time,” Tingle explained. “But once we issue a policy, we never do anything with that information again.”
Today, noncommunicable diseases such as heart disease and cancer are the leading causes of death in the United States. John Hancock saw an opportunity and decided to do something about it. “We’re really trying to drive change in the life insurance industry to be less about death and dying and more about living,” Tingle said.
At the core of this program are the points you earn from daily activities such as exercise, eating right, and annual health checkups. Points are accumulated and become status, which determines rewards. These look like discounts on wearable products, gift cards, hotel discounts, and more. Most Vitality members who earn points participate in the program at least 20 times a month. There are two versions of the program, with the top tier offering up to 25% off premiums for Healthy Choices. To date, nearly 90% of eligible members have realized premium savings over the life of their policy.
Some of John Hancock’s benefits are in direct conflict with health insurance company benefits. For example, discounts on Grail’s Galeri multi-cancer detection test and Prenuvo’s whole body MRI. Membership in Headspace and Function Health. There are also important points regarding vaccinations and annual health checkups.
This program has proven popular. A quarter of John Hancock policyholders say the Vitality program is the reason they visited the insurer in the first place. And 70% say it’s an important factor. Through this program, half of our members with high blood pressure got their numbers within range. 45% reported a decrease in BMI. According to John Hancock, 63% of people with high cholesterol are within range. Some people who have had the Prenuvo or Galleri test have identified cancer that they would not have otherwise noticed. Looking to the future, Tingle is eyeing GLP-1 incentives.
Payers and employers face the challenge of turnover, Tingle noted. Members come and go. In the life insurance industry, they last for decades. John Hancock recently paid a claim to a policyholder who had been a customer for 99 years. “So we have a very long-term view of investing in these incentives and rewards,” Tingle said. “And we make sure that they are clearly rewarding, not just for our clients, but for us as well.”
Perhaps surprisingly, premium savings are not a popular vitality perk. The highest rated ones are much simpler. After every 10 workouts, members can spin the “Vitality Wheel” for a random drawing for prizes like more points or a small gift card. “It’s not just pure dollar value,” Tingle points out. “It’s about engagement.”
MassMutual’s head of digital health and fintech, Michael Gallery, explained that MassMutual launched its wellness program in 2022 after noticing that consumers are increasingly concerned about their health. “Health is good for you, but it’s also good for us,” he said.
One in five trial participants were found to have an increased genetic risk for the disease. In the pilot, 71% of the 1,400 policyholders who underwent genetic testing reported changing their behavior as a result. Genetic risk assessments are now available for free to many MassMutual policyholders through Genomics. The pilots also detected dozens of cancer signals. Grail’s Galleri detection test is currently available free of charge to all policyholders age 50 and older. At MassMutual, we know that health insights are empowering.
“This gives patients the ability to consult with their doctors,” Gallery said. “Our goal is to help policyholders better understand the types of risks they are exposed to.”
Additionally, MassMutual is offering free access to Wysa Assure, an AI-powered mental health app built specifically for the insurance industry.
MassMutual does not disclose what portion of its members participate in wellness programs. However, feedback from the pilot has encouraged continued investment in this area. The goal is to motivate sustainable behaviors that lead to healthy outcomes. A recent MassMutual survey found that 80% of Americans say actively investing in their health makes better financial decisions.
“We already have advisors who think of themselves as kind of holistic and can talk about all aspects[of client well-being],” Gallery said. “This work on health is part of the bigger picture when we talk about financial well-being.”
In addition to these benefits, MassMutual has physical activity and sleep apps integrated with the wearable. No rewards or incentives will be provided. Gallery argued that the insights alone are valuable to members, pointing to the fact that consumers are willing to pay to access their data through wearables like Oura.
“We’re working harder to develop insights that we can provide to people,” Gallery said. “If we can engage people in a way that allows them to better understand how certain behaviors and certain activities can impact lifespan…we think that could actually add a lot of value.”
Wellness opportunities could even change the composition of a life insurance company’s policyholders. “We’re attracting a broad audience. We’re seeing young people thinking about life insurance in other types of life events,” said Matt Berman, president and CEO of Foresters Financial. Younger consumers, in particular, “look for organizations that are purpose-driven and have a strong collective sense.”
Foresters Financial, a fraternal benefits organization focused on wellbeing, launched its wellness platform Foresters Go in 2020. Since then, the number of monthly active users has grown to 26,000. Members can participate in nutrition and exercise challenges or volunteer activities. Recent research suggests that volunteering is good for people’s mental health.
The platform also integrates with wearables and tracking apps. Users can earn points and redeem them for wearables, electronics, home goods, gift cards, or donations to charity. “There’s a sense of community and competition,” Berman explained.
Apart from the app, Foresters offers discounts on online therapy, fitness equipment, vision care, and nutritional support.
Berman envisions a world in which pricing for life insurance products evolves into a dynamic model, where premiums could be revalued if someone dramatically improves their health. To do this, more customers need to feel comfortable sharing their data with life insurance companies. “If we can strengthen trust and increase transparency, we can certainly create a more dynamic pricing model,” Berman said.
From one expert’s perspective, life insurance companies offering health insurance remain the exception, not the rule. “I think there is a core group that is interested in adding benefits to their life insurance policy, but I also think there is another fairly large group that just wants life insurance,” LIMRA Life Insurance Research Director Karen Terry told Fierce Healthcare. “And I think that’s a personal preference.”
Tingle spends his time convincing other life insurance leaders that “as an industry, we all need to be at the forefront of the longevity conversation.” Earlier this year, John Hancock and MIT AgeLab released the Longevity Readiness Assessment Tool as part of a multi-year collaborative project. A survey of more than 1,300 adults found that Americans score an average of 60 out of 100. Nursing care and health were the areas with the greatest scope for improvement.
Tingle believes that healthcare challenges are complex and solutions require many different stakeholders working together. Life insurance companies have historically kept health policy on the sidelines, despite having so much at stake. “I think it’s time for the life insurance industry to come together and stand up,” Tingle said. “And we are trying to lead the way there.”
