Technology Meets John Gauntels
By Maurice Walch
In 1662 John Gaunt, a haberdasher in London England, used statistics to create the first mortality tables. These tables ultimately formed the basis of future statistical works that life insurance companies use today to calculate insurance premiums.
Over the past 350 years mortality tables have changed as living conditions and technology have increased the average life expectancies. As we live longer, the life companies have a longer period of time to receive premiums before we become “actuarially mature” (dead), so they have been able to reduce the pure cost of insurance over time. Conversely, the longer we live, the longer the life companies can defer paying the life insurance benefits. So it’s a win/win for the life insured and the life company if we live as long as possible.
Based on the above, it’s no great surprise that life insurance companies have an incentive to help us live longer. Over the past 150 years of setting policy premiums, life insurance companies have been limited to penalizing the public for a poor past history of health and asking for more premium if we have not been taking care of ourselves. Now with the increasing use of mobile technology in our daily lives, life companies are starting to harness that technology to reward us for potentially extending our lives.
In 2016 Manulife introduced its Vitality Program. This is a form of term life insurance that is structured and priced in such a way that it encourages people that purchase these life insurance policies to adopt healthy habits. By making healthier lifestyle decisions, the insured clients can earn points. These points are totaled annually and as more points accumulate the individual’s “vitality status” increases. The attained vitality status then determines what the client will receive in the way of rewards or even a reduction in premiums.
People who sign up for this program by purchasing these special term life insurance policies, receive a free Garmin activity tracking device. If you already have a fitness device or use fitness apps they may well be compatible with the program. Many of the normal activities of the day qualify for points. Things such as walking or cycling will help you attain points as the apps and devices track things like your heart rate and calories. There is even a Manulife Vitality app for your phone that allows you to input activities such as skiing or a visit to the gym.
Almost everyone has had a New Year’s resolution fall flat by about January 5th. The key to many successful resolutions is to give yourself rewards for attaining certain goals. Manulife’s program provides annual rewards programs but also seems to have planned to have random fitness promotions throughout the year to keep it interesting.
For the competitively minded or those that are detail oriented there is an annual health analysis provided free of charge. This provides a baseline with annual updates to better understand the points system and how best to increase your vitality level.
Technology has increased the ability of those with innovative ideas to be disruptors in their markets. It’s interesting to see a company so old that it was founded by the first Prime Minister of Canada, Sir John A. Macdonald, demonstrate an ability to move beyond the traditional and embrace the future.
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