The past several years have seen strong growth in life insurance, in part thanks to the COVID-19 pandemic, with half of Americans owning a policy today.
While life insurance has traditionally been seen as a death benefit—something that offers families financial assurance after a loved one has passed—part of the industry is expanding into wellness benefits for the living.
This reflects burgeoning demand: a third of consumers are interested in free mental health and wellness services to go along with their life insurance, trade group LIMRA finds. Nearly a quarter are also interested in gym memberships, health coaching and diet planning.
John Hancock has been leading the way for over a decade. In 2015, it launched its Vitality program with the idea of encouraging healthy living. Discounts on fresh produce, wearables and various health memberships are just one part of the array of offerings.
John Hancock CEO Brooks Tingle is honest about the business incentive. Life insurers make money by investing their customers’ premiums. That means the longer they live, the more money the company stands to make.
“It’s very much in our interest to have our clients live a longer, healthier, better life,” Brooks Tingle, president and CEO of John Hancock, said on a recent episode of Fierce Healthcare’s Podnosis. “The longer we collect the premium and invest those dollars before we pay out the death benefit—I’ll be totally candid—the more money we make.”
Life insurers are intimately familiar with death and what causes it. A process known as underwriting forms the basis of someone’s premium. The process is robust, requiring life insurers to peer into medical records to make a determination, depending on their risk.
“Oftentimes, we, as an underwriter, will know more about a client’s health than their own doctor because we see the complete picture over a long period of time,” Tingle explained. “But once we’ve issued the policy, we would do nothing with that information ever again.”
Today, noncommunicable diseases like heart disease and cancer are the leading cause of death in the U.S. Seeing an opportunity, John Hancock decided to do something about it. “We’re really trying to drive a change in the life insurance industry that says [it] should be less about death and dying, and more about living,” Tingle said.
Core to the program are points, which are earned from every day activities like exercising, eating well or getting annual health screenings. Points accumulate to a status, which determines rewards. These could look like discounts for wearables, gift cards or hotel deals. Most Vitality members earning points engage with the program at least 20 times a month. Two versions of the program exist, and the higher tier boasts up to 25% off premiums for healthy choices. To date, nearly 90% of eligible members earned premium savings over the lifetime of their policy.
Some of John Hancock’s benefits outright compete with those of health insurers: discounts on Grail’s Galleri multi-cancer detection test and Prenuvo’s full-body MRI; memberships to Headspace and Function Health; and points for getting vaccines or annual check-ups.
The program has proven popular. A quarter of John Hancock policyholders say the reason they came to the insurer in the first place is for the Vitality program. And 70% say it’s an important factor. Through the program, half of the members with high blood pressure have brought their figures in range; 45% have reported BMI reductions; and 63% with high cholesterol have brought it in range, according to John Hancock. Some who have taken the Prenuvo or Galleri test have identified cancer they otherwise wouldn’t have known about. For the future, Tingle is eyeing GLP-1 incentives.
Payers and employers face the challenge of churn, Tingle noted: members come and go. In the life insurance business, they remain for many decades. John Hancock recently paid out a claim for a policyholder who had been a customer for 99 years. “So we have a very long-time horizon to invest in these incentives and rewards,” Tingle said, “and have them obviously pay off for the client, but also for us.”
Perhaps surprisingly, premium savings are not the favorite Vitality perk. The top-rated one is much simpler. Every tenth workout, members can spin the “Vitality Wheel” for a random drawing of a prize, like more points or a small gift card. “It’s about more than just the pure dollar value,” Tingle noted. “It’s about the engagement.”
MassMutual launched its wellness program in 2022 after observing that consumers are increasingly interested in their health, MassMutual Head of Digital Health & Fintech Michael Gallary explained. “Good health is good for you, and it’s also good for us,” he said.
In pilots, one in five participants discovered they were at higher genetic risk for diseases. In a trial run, 71% of the 1,400 policyholders who took genetic tests reportedly changed their behaviors as a result. Genetic risk assessments are now available to many MassMutual policyholders for free through Genomics. Pilots also detected dozens of cancer signals. Now, Grail’s Galleri detection test is available for free to all policyholders aged 50 or older. MassMutual recognizes that health insights are empowering.
“That allows them to then engage with their doctor,” Gallary said. “Our goal is to help the policyholder gain a better understanding of the types of risk they have.”
Additionally, MassMutual offers free access to Wysa Assure, an AI-powered mental health app specifically built for the insurance industry.
MassMutual won’t share what portion of its members engage with the wellness program. But feedback from its pilots prompted its ongoing investment in the area. The goal is to motivate sustainable behaviors that lead to healthy outcomes. In recent research, MassMutual found 80% of Americans say they make better financial decisions when actively investing in their health and wellness.
“We have advisors already that consider themselves to be kind of holistic, and can talk about all the dimensions of a [customer’s wellbeing],” Gallary said. “This effort around wellness is a piece of the bigger picture of when we talk about financial wellbeing.”
Beyond these benefits, MassMutual has a physical activity and sleep app that integrates with wearables. It doesn’t offer rewards or incentives. The insight alone is valuable to members, Gallary argues, pointing to the fact that consumers are willing to pay to access their own data through wearables like Oura.
“We’re doing more work to develop insights that we can deliver back to people,” Gallary said. “If we can engage people in a way that they gain a better understanding of how a certain behavior or a certain activity can impact their longevity … we think that that could actually provide a lot of value.”
Wellness opportunities can even change the makeup of a life insurer’s policyholders. “It’s attracting a broader audience. We’re seeing younger individuals thinking about life insurance at other types of life events,” Matt Berman, president and CEO of Foresters Financial, said. Younger consumers in particular are “looking for organizations that are purpose-driven, that have a strong collective ethos.”
Foresters Financial, a fraternal benefits society focused on wellbeing, launched its wellness platform Foresters Go in 2020. It has since grown to 26,000 monthly active users. Members can participate in a nutrition or exercise challenge, or volunteerism. A recent study suggested volunteering is good for people’s mental wellbeing.
The platform also integrates with wearables and tracking apps. Users can earn points and redeem them for wearables, electronics, household items, gift cards or donations to charity. “There’s a sense of community, competition,” Berman explained.
Separate from the app, Foresters offers discounts for online therapy, fitness equipment, vision care and nutrition support.
Berman sees a world where pricing life insurance products could evolve to a dynamic model, where if someone makes dramatic improvements to their health, their premiums could be reevaluated. This would require more customers to feel comfortable sharing their data with a life insurer. “If we can facilitate stronger trust, better transparency, you can definitely create a model where there is a more dynamic sense of pricing,” Berman said.
From one expert’s point of view, life insurers offering health benefits remain the exception, not the rule. “I think there's a core group of people that are interested in additional benefits to their life insurance policies, and there’s another pretty sizable group that just wants life insurance,” LIMRA Director of Life Insurance Research Karen Terry told Fierce Healthcare. “And I think that’s personal preference.”
Tingle spends time convincing other life insurance leaders that “as an industry, we should all be at the forefront of these discussions about longevity.” Earlier this year, John Hancock and MIT AgeLab published a longevity preparedness assessment tool as part of a multi-year collaborative project. In a survey of over 1,300 adults, they found Americans score 60 out of 100, on average. Caregiving and health were areas with the most room for improvement.
Healthcare challenges are complex, requiring many different stakeholders working toward solutions, Tingle believes. Life insurers have been on the sidelines of health policy historically, despite having so much at stake. “I think it’s time for the life insurance industry to step up collectively,” Tingle said. “And we’re trying to lead the way there.”