A life insurance company is using incentives to encourage healthy habits among its customers, which also benefits the company’s financial bottom line.
The Vitality program from John Hancock rewards policyholders with points for engaging in healthy activities such as gym visits, purchasing nutritious foods, tracking sleep, and undergoing preventive screenings. These points can then be exchanged for perks like discounts on smartwatches, gift cards to popular retailers, hotel deals, savings at stores, and discounts on fruits and vegetables.
“I’ve already got 5,400 points. I’m silver, almost approaching gold,” said Matt Hudack, a financial planner and John Hancock policyholder, as he reviewed his app. As an outdoor enthusiast, he appreciates the REI discount. “It’s really a nice incentive.”
Similar to the rewards systems used by airlines for frequent flyers, the Vitality program allows customers to advance through tiers from bronze to platinum as they cultivate healthier habits. Hudack enjoys the program’s digital prize wheel feature, which he can spin after achieving activity milestones. “The spins are fun,” he remarked.
John Hancock CEO Brooks Tingle explains the program reflects a shift in perspective concerning the life insurance business, traditionally focused on death preparedness. “What we’ve done is turn that around. This is about living, and living better,” Tingle says.
The logic is straightforward: healthier customers live longer and are more profitable as they pay premiums over extended periods. “You want to live a long, healthy life? It’s good for us, too,” Tingle states. There is alignment between the company’s financial goals and customer benefits.
Gamifying Health
Cardiologist Dr. Dariush Mozaffarian, involved in designing the program’s dietary incentives, believes the gamified structure keeps people engaged. “What’s exciting about gamification is making it fun and having prizes. Growing evidence shows it actually works quite well,” Mozaffarian says, highlighting the psychology behind uncertain rewards.
Mozaffarian points out research supporting financial incentives to promote healthier dietary habits amidst widespread diet-related diseases.
Complexity of Behavior Change
During a hearing on modernizing healthcare, Tingle shared with lawmakers the program’s early results, noting that Vitality members walk twice as many steps daily compared to the average American and half of members with high blood pressure improved their conditions within a year. John Hancock also collaborates with firms offering advanced screening tests, providing members with discounted access to early detection tests.
Geriatrician Dr. Samir Sinha expresses cautious optimism, stating, “There’s not enough evidence right now to say these programs will have the intended effect on longevity.” He notes that if healthy behaviors become lifelong habits, they may create a longevity dividend.
The concept isn’t entirely new, similar to car insurers offering lower rates to drivers who demonstrate safe driving habits. Enrolling in the Vitality program allows customers to receive up to 25% savings on premiums, depending on the chosen version.
A Positive Conversation
Hudack finds the program beneficial professionally. As a financial planner, discussing life insurance with clients can be grim, as it underscores mortality. But the Vitality program shifts the focus to healthier living. “They like the idea that their life insurance is now a tool for healthier living,” Hudack explains, noting he dedicates one staff member to servicing Vitality clients.
On Monday mornings, Hudack observes his app activity counter reset but feels encouraged to start fresh. “I’ve got to get going,” he concludes.