John Hancock Insurance Wants to Be Your Health Coach

Insurance, Life Insurance
How a Fitbit Could Save You Money on Life Insurance

It’s not just your spouse who’d like you to hit the gym or eat healthier. Now it’s your life insurance company, too.

John Hancock, which began offering discounts in 2015 to policyholders who exercise or get annual health screenings and flu shots, widened the program in 2016. Now customers can earn an Apple Watch for healthy habits and get rewards for buying healthy food.

“Fitness is really important, but it’s clear that the best recipe for better health is a combination of activity plus good nutrition,” says Michael Doughty, president of John Hancock Insurance.

The company, a subsidiary of Canada’s Manulife Financial, announced the program’s healthy food expansion in April and the new Apple Watch program in November 2016. The “Vitality” option is available in most states on a growing number of John Hancock’s term life and universal life products.

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How it works

If you buy a policy linked with the Vitality program, your actions earn you points that place you into one of four levels — bronze, silver, gold or platinum. Points qualify customers for hotel discounts, gift cards and other perks. The higher you go, the more you save on premiums, too — up to 15% annually. The points reset each year, so you have to continue the healthy habits to keep earning discounts and rewards.

With the HealthyFood benefit, you earn points by purchasing fruits, vegetables, whole grains and other nutritious foods from any of 16,000 participating stores nationwide, including Wal-Mart. You swipe a card when you buy the groceries, and the data goes to John Hancock. Besides earning Vitality points, you also get discounts or cash back of up to $600 a year on your grocery bills. And you get free access to nutrition guidance from the Friedman School of Nutrition Science and Policy at Tufts University.

You can also earn points for exercising, getting an annual health screening, or receiving a flu shot. When you sign up for Vitality, John Hancock will send you a free Fitbit to track activity. You can also track exercise with smartphone apps and devices like the Apple Watch. And now you can sign up to earn an Apple Watch Series 2.

To get the watch, you pay $25 plus sales tax. You track your activities, and each month the points go toward paying for the watch. The retail cost of the watch is spread across 24 months. Each month that you meet your activity targets, you pay nothing. If you fall short one month, you’ll pay part or all of that month’s portion of the watch. At the end of 24 months, the watch is yours.

John Hancock says a 45-year-old couple each buying $500,000 Protection UL with Vitality life insurance policies could save about $25,000 on their life insurance rates to age 85, and even more if they live longer, assuming they reach gold status each year.

To launch the program in 2015, John Hancock teamed with The Vitality Group, a member of Discovery Ltd., a global financial services organization that offers incentive-based wellness programs to employers and insurers around the globe. John Hancock is the only U.S. life insurer working with Vitality.

Doughty says his customers are embracing the program. Vitality policyholders take an average of 9,205 steps a day, compared with the 5,900 daily steps taken by the average U.S. adult.

Privacy concerns

The personal data ends up on insurance company computers, which may concern consumers in the wake of recent data breaches, including last year’s massive breach at health insurance giant Anthem, in which hackers accessed account information for millions of customers.

A John Hancock spokesperson says it won’t share health or healthy food data with any other entities, except to administer the program, and has taken “technical, administrative and physical safeguards to protect clients’ personal information from unauthorized access and improper use.”

Thirty percent of consumers overall and 51% of millennials are very or extremely likely to consider wearing an activity tracker and sharing results with a life insurer to earn financial rewards, according to the 2016 Insurance Barometer Study by industry group Life Happens and LIMRA, a global research and consulting group. Among consumers of all ages who already use an activity tracker, the percentage climbs to 65%.

Changing the conversation

This comes amid slumping life insurance sales. Just 44% of American households own individual life insurance, a 50-year low, according to LIMRA.

“There’s this disconnect between people needing life insurance and buying it,” Doughty says. “It’s always on people’s list, but it never gets to the top.”

The Vitality program makes life insurance fun to own, he says. A popular part of the program is the ability to earn small perks throughout the year. After you complete a short-term goal, such as 10 workouts, for instance, you can spin a wheel on an app to win a prize, such as a Starbucks gift card.

The program earned John Hancock a nod from global research and advisory firm Celent as a 2016 Model Insurer of the Year for innovation and use of emerging technologies.

The Vitality option “changes the conversation” about life insurance, says Tom Scales, Celent’s research director of life and health insurance practice in North America. Instead of talking about your death, he says, “They’re asking, ‘How can we help you live more healthily and extend your life?’ ”

Updated Nov. 21, 2016.