Interactive life insurance is designed to help policy owners live longer lives. That is a bold statement. But is it true? If so, what a concept! Life insurance to help you live. Most people think of life insurance as something you buy to protect your family when you die. That is true.
So what is interactive life insurance? It is very competitively priced life insurance that is more actuarially sound than life insurance sold based on big data. In other words, it is life insurance based on a more sound business model than its competitors. We’ll talk more about big data-based insurance in a moment. But let’s look more carefully at why interactive life insurance has become so popular. A significant challenge that we all face every day is not having enough time. The most valuable benefit that interactive life insurance gives many people is more years to their life.
The advantage of owning life insurance is a concept that has stood the test of time. In the United States, the use of life insurance dates before the twentieth century. If you have financial obligations, life insurance is a way to pay for those obligations if you die. Two obstacles prevent some people from owning life insurance. First, some people do not like to think about planning for their death because it is uncomfortable. Additionally, some people are not concerned about what happens after they die.
Analytical Data Proves Interactive Life Insurance Works
Interactive life insurance eases some of those concerns. It takes a different approach by helping interactive life policy owners to focus on extending their lifespan by remaining physically active. It is a fact that, on average, those with active lifestyles live longer lives. Researchers with the National Cancer Institute indicated that increased physical activity added 4.5 years to an average person’s life (Moore et al., 2012). Additionally, researchers reported in the British Geriatrics Society journal, Age and Aging, that not only does physical activity extend the probability of people having longer lives. Physical activity also decreases the likelihood of those between the ages of 50 and 75 suffering from chronic diseases (Leskinen et al., 2018).
Worldwide Popularity of Interactive Life Insurance
Interactive life insurance is like a secret that the rest of the world knew about, and it is finally being introduced to the United States. South African entrepreneur Adrian Gore introduced interactive life insurance through the insurance company he founded, Discovery Limited. Interactive life insurance was introduced to the United Kingdom by VitalityLife, a subsidiary of Discovery Limited. Through AIA, a sizeable pan-Asian life insurance group AIA Vitality represents interactive life insurance offered in eighteen markets in the Asia-Pacific region, including Australia, China, and India. Throughout Europe, interactive life insurance is provided through insurer Generali which created GeneraliVitality. In Japan, SoftBank and Sumitomo Life Insurance offer Sumitomo Life Vitality. AIA is an insurance company in China that offers interactive life insurance through Vitality as well. And in Canada, insurer Manulife is offering interactive life insurance through Manulife Vitality.
Moreover, in the United States, John Hancock Life Insurance is the first major US life insurance company to introduce interactive life insurance. So why is the idea of interactive life insurance turned into a worldwide phenomenon? The reason is that they all have discovered what every person in the world wants; they all want to live a longer life.
Interactive Life Insurance vs. Big Data Life Insurance
The concept of interactive life insurance is more actuarially sound than life insurance sold based on big data. Life insurance is a business product that has a very long profit window. A life insurance policy may take five to seven years to be profitable to a life insurance company. Both interactive and big data life insurance concepts have become more prevalent in the United States within the past five years. The term big data in this context is a term that describes the utilization of relevant human data and analyzes its implications. Big data for life insurance companies have not been used long enough to determine if it is a long-term profitable business model. On the other hand, interactive life insurance is developed on a clinically proven basis that living an active lifestyle will extend people’s lives on average.
In contrast, two companies offering life insurance policies developed on the theory of big data are Ladder Life Insurance and Haven Life Insurance. Both of these companies have established their policies based on the data derived from the habits of a vast pool of people. For example, people with a good driving record are a reasonable life insurance risk using the big data philosophy of life insurance. Along with driving, big data life insurance companies look for other risk indicators such as people taking fewer prescriptions. In most instances, big data life insurance companies ignore blood tests and the opinions of an applicant’s doctor. Big data life insurance companies accept customers based on data analyzed within a few moments to a few days. Will big data life insurance companies make enough profit to continue their business practice? No one knows; however, an educated guess would be yes.
Big Data Technology Drives the Future
Big data life insurance will be profitable to continue for the foreseeable future. Although, they may not be able to maintain the liberal method of offering and accepting life insurance customers with their current business practices. Big data life insurance companies have enough support from parent companies to weather most financial dilemmas. The most significant potential problem that big data life insurance companies could have is if their data collection methods are not as accurate as anticipated. A higher number of death claims in a short period could be bad news for such life insurance companies. Time will be the determining factor.
On the other hand, companies using the interactive life insurance model use the time-tested strategies of analyzing a person’s medical history. Plus, interactive life insurance companies incentivize their customers to live healthy lifestyles. It is apparent from the tremendous number of established insurance companies worldwide that the incentives that South African insurer Discovery Limited developed are incentives that people want. The appeal of living longer is a desirable incentive to many people.
Why is Interactive Life Insurance So Popular?
The most significant factor that sets big data life insurance companies apart from interactive life insurance companies is that interactive life insurance companies become a part of their customer’s efforts to have an active and healthy lifestyle. Big data life insurance companies use the same client service model that life insurance companies have for decades. The only different thing is the application process. Once the customer purchases the life insurance policy, only three things can happen: the customer dies, and the life insurance company pays the benefit; the customer outlives the policy, or the customer drops the policy.
The First Interactive Life Insurance in the United States
The approach of an interactive life insurance company is to be involved with the customer constantly. Therefore, the customer is incentivized to stay connected with the interactive life insurance company because they get ongoing support to live an active lifestyle and remain healthy. Here is how John Hancock Life Insurance Company uses the Vitality process in the United States. People interested in their interactive life insurance find the policy and price that fits their personal financial situation. The company has two programs; Vitality Go and Vitality Plus. The first program, Vitality Go, has no additional charge for the services provided. There may be a small monthly fee for the Vitality Plus program. However, if policyholders follow the program’s parameters, the Vitality Plus cost may be waived.
Each Vitality program earns points. Customers can earn Vitality points for the everyday things they do to be healthy, like exercising, eating well, and getting annual check-ups. The more Vitality points customers accumulate, the higher their Vitality status. The Vitality status is broken into four easy-to-understand levels: bronze, silver, gold, and platinum: the higher the customers’ Vitality status, the greater the customer rewards and discounts.
The free Vitality Go program is available with every John Hancock Life Insurance policy. The central aspect of the program is a fitness tracker. Each customer can receive a Fitbit fitness tracker, or they may be able to receive discounts on Polar or Garmin fitness devices. Additionally, customers get discounts on Amazon.com, savings on REI healthy gear, the Tufts Health and Nutrition Letter, and Live More magazine. The Vitality programs engage customers through expert nutrition, fitness resources, a user-friendly website, and a smartphone app—all designed to help customers stay physically active and increase their lifespan.
Living Benefits Increase Value Now
The Vitality Plus program offers even more. The cost is as little as $2 per month for many policies that John Hancock provides. For term life insurance policies, the cost of the Vitality Plus program is 3% of the policy’s premium. Customers in the Vitality Plus program can earn up to 15% annual savings in the life insurance cost for earning Vitality points. In addition, an Apple Watch is also available for a small monthly charge. Customers have the opportunity to earn enough Vitality points to wave the monthly cost of the Apple watch. Here is a run-down of all of the additional benefits of the Vitality Plus program:
- All customers are offered the complimentary Fitbit and between 25% to 40% discounts from Garmin, Polar, and REI
- Up to 50% discounts from Hotels.com
- Up to $600 in healthy food savings from Walmart, NutriSavings, and Edenred
- A free 12-month subscription to Headspace, which offers better sleep and meditating information.
- Shopping rewards for Amazon and Apple
- Tufts Health and Nutrition Letter and Live More magazine
- Free health check through Quest Diagnostics, which earns Vitality Points.
- Beginning in January 2019, a free Amazon Prime Membership
The Reasons for Popularity are Clear
There are so many additional benefits available from both Vitality programs that it can be overwhelming at first. However, it is essential to come back to the core reason for all the free and discounted programs and items. The reason for such interest in interactive life insurance is the same reason that so many people searched for the Holy Grail throughout history. It is the reason that so many people throughout the world are using the Vitality programs. Interactive life insurance taps into a desire that almost every person has, the desire to live a long and healthy life. For that reason alone, interactive life insurance is thriving and is here to stay.
Leskinen, T., Stenholm, S., Aalto, V., Head, J., Kivimäki, M., & Vahtera, J. (2018). Physical activity level as a predictor of healthy and chronic disease-free life expectancy between ages 50 and 75. Age and Ageing, 47(3), 423-429. https://doi.org/10.1093/ageing/afy016
Moore, S. C., Patel, A. V., Matthews, C. E., Berrington de Gonzalez, A., Park, Y., Katki, H. A., … Lee, I. (2012). Leisure time physical activity of moderate to vigorous intensity and mortality. PLoS Medicine, https://doi.org/10.1371/journal.pmed.1001335