Life insurance policies that reward healthy living are increasingly popular for the benefits they offer to both the client and the insurer. These incentive-based programs help clients earn savings and rewards that can be applied toward their policy while reducing their insurable risk. Insurers tend to offer better coverage and lower premiums to clients with healthy habits.
Common incentives include discounts and rewards for physical activity, health screenings, and preventive self-care. Some insurers provide complimentary activity-tracking devices to encourage clients to maintain a healthy lifestyle. Like any insurance policy, plans that reward healthy living present a common set of pros and cons. Explore whether this plan is right for you.
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How Life Insurance Companies Reward Healthy Living
Many life insurance companies that reward healthy living operate on a point system. They may enroll clients at a baseline level and increase their points and rewards as healthy habits increase. Clients may earn points for exercise, health education, and wellness exams.
Insurance companies commonly offer monthly premium discounts and may also include cashback bonuses and other financial incentives to clients on a fitness journey. Life insurance companies prefer healthy clients who can help save money on costly medical services and hospitalizations.
Proving Healthy Habits to Insurance Companies
Insurers may cover a variety of healthy habits, including nutritional health and wellness, exercising, and visiting your physician for preventive checkups. All insurers require clients to provide “proof” of maintaining these healthy habits, most commonly through smartwatches, wellness or fitness apps, or medical reports.
Receiving a free fitness tracking device such as a FitBit or AppleWatch is incentive enough for many clients to pursue a healthier lifestyle. However, some insurance companies require new enrollees to endure a brief waiting period to receive their device and start earning rewards. Insurers tend to offer rewards commensurate with increased documentation of healthy habits.
Privacy Concerns With Health-Tracking Insurance
While health-tracking insurance can offer incentives, including financial relief, it may also present some unique privacy concerns. Insurers that provide clients with complimentary tracking devices should clearly convey their security, transparency, and consent policies for data sharing.
If left unchecked, these types of insurance programs could potentially infringe on clients’ privacy. Since health-tracking technology in the context of life insurance is still relatively new, implementing data security measures now, while these programs are in their infancy, is of the utmost importance.
Benefits and Drawbacks of Health-Tracking Insurance
Health-tracking insurance plans may present both advantages and disadvantages, depending on your individual priorities and circumstances.
Advantages
- Financial Rewards: Health-tracking insurance plans typically offer lower premiums and other savings on policy costs.
- Increased Fitness: Tracking your fitness can help you lose weight, decrease chronic illness, and increase your energy levels.
- Better Health: Focusing on wellness helps reduce the need for emergency medical care and hospitalizations.
- Free Tracking System: Clients who enroll in a health-tracking insurance plan may enjoy a complimentary tracking device, fitness-tracking app access, or gym membership.
Drawbacks
- Privacy Concerns: Some clients may be uncomfortable allowing a tracking device to share their personal information with their insurer, potentially increasing their vulnerability to hackers.
- Potential Discrimination: There’s a risk of discrimination based on health data. Individuals with certain health conditions or lifestyles could face higher premiums or even denial of coverage.
- Accuracy and Reliability: Wearables and health tracking apps may not always provide accurate or consistent data. Incorrect data could unfairly impact insurance rates or benefits.
Tips for Policyholders Interested in Health-Tracking Insurance
You may want to jumpstart your healthy lifestyle habits before purchasing a health-tracking insurance plan. Build some momentum by following these simple tips:
- Do your research. Every health-tracking insurance plan offers different benefits, so you should contact your preferred life insurance carrier to ask for details. Make sure to compare programs that meet your health and financial goals.
- Read the fine print. Plans may offer significant savings and rewards but include other requirements that do not serve your needs. Watch for factors you might consider non-starters, such as unethical data sharing or using complex technology.
- Refresh your technology skills. Since many health-tracking insurance policies rely on fitness-tracking devices and apps, exploring the basics of this technology is important. Brushing up on your skills before enrolling can help you maximize these benefits.
- Set your healthy lifestyle goals. Before purchasing a health-tracking insurance plan, start trying out some healthier habits, such as increasing your daily physical activity or incorporating more nutritional foods into your diet.
The Evolution of Life Insurance
Life insurance companies are expected to increasingly offer incentives to clients who live a healthy lifestyle. The evolution of life insurance from traditional policies to a wellness-based approach follows a similar shift in health insurance plans, which emphasize preventive care and related savings.
Naturally, both the insurer and the insured can enjoy the benefits of healthy living. Insurance providers can avoid the higher risk and save on the medical and hospital costs of insuring a person with preventable health conditions. Likewise, beneficiaries can pay lower premiums, earn cash rewards, and redeem perks like FitBits and gym memberships for healthy habits.