John Hancock extended its wellness initiative to its Accumulation Variable Universal Life (VUL) policyholders. This is an expansion of the program the company launched earlier this year, when it linked its wellness program to lower premiums for some whole life and term life policyholders.
The new program, dubbed Accumulation VUL with Vitality, is targeted at preretirees. It offers policyholders the chance to increase the cash value in the VUL policy beyond what the company would normally offer in its Accumulation VUL product.
John Hancock previously had announced plans to add other insurance products to the “Vitality” lineup of life products.
“Americans are increasingly concerned about outliving their savings in retirement," Michael Doughty, president of John Hancock Insurance, said in a news release.
"They are also living longer, but not necessarily healthier lives. Accumulation VUL with Vitality can help them increase their retirement income potential while also motivating and rewarding them for living healthy — now and in the future.”
Accumulation VUL with Vitality policyholders could raise the value of their VUL policy by thousands of dollars as they near retirement, the company added.
In the spring, Hancock announced Protection UL with Vitality and John Hancock Term with Vitality. These allow policyholders to accumulate “vitality points” for participating in annual health screenings or consenting to a flu shot.
Policyholders rack up points through daily activities that include walking, running, going to the gym, submitting to an annual physical, getting a flu shot, going to the dentist or participating in a five-kilometer race.
A 45-year-old couple displaying average health metrics buying Protection UL with Vitality life insurance policies of $500,000 each could save more than $25,000 on premiums by the time they reach 85 if they reach “gold status” every year, the company said.
Vitality Group, a company that integrates wellness benefits with life insurance products, tracks the well-being of policyholders through wearable technology such as Fitbit.
The more points policyholders receive under Accumulation VUL, the more policy credits are applied to the VUL policy’s cash value, the company said. Points are never used against policyholders participating in the Vitality program, Doughty told CNBC last spring.
John Hancock’s initiatives have elicited the curiosity of the life insurance and technology communities. The programs represent a new way for life insurers to collect data in an age where data collection has become cheap and easy.
With computers capable of crunching trillions of bits of information in seconds, the industry is looking for new ways to reward policyholders at a time when low interest rates have made life insurance a tough sell.
Few people, if any, are expecting the rewards will actually do much to elicit radical behavior changes. However, the industry is interested in seeing what John Hancock will eventually do with the data it collects on policyholder habits.
Some experts say the data will help John Hancock project its losses among the pool of people who agree to participate in the wellness program and get a more accurate gauge of the collective risk exposures of the group.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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