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Would you give an insurance company access to your fitness activity?

The insurance industry has seen a rise in companies offering wellness incentive programs and pricing based on fitness tracking. Haven Life conducted research to understand consumer perception.

A person checks their health with a fitness tracker, phone and computer

The proliferation of wearable devices and their associated apps has evolved to a point where you can monitor and track almost anything health related from a central point. Whether it’s your daily movements or fitness classes, your sleep patterns, and breathing exercises, or your food intake and heart rate (which can apparently detect diabetes with an accuracy of 85%), it’s all centered around bringing more mindfulness to the current state of your health.

Naturally, this adoption of health and fitness tracking among consumers is capturing the attention of industries that have a business interest in encouraging you to be healthier: specifically, the health and life insurance industries. The result is more insurance companies offering programs that center around an exchange of consumers’ health, lifestyle and fitness data for discounted premium pricing and wellness rewards.

Those who support the movement to interactive insurance policies say it’s to benefit and reward the consumer; that these rewards will encourage customers to live healthier lifestyles, and, in return, it can help them live longer and establish a more meaningful relationship with their insurance provider.

Those against it raise discrimination, privacy and security concerns. They question where the line is between incentive and punishment, and, ultimately, are apprehensive of a future where these types of programs are no longer voluntary, and consumers will have to decide between their privacy and the affordability of their premiums.

But at the end of the day, the perception that matters the most is the one belonging to the individuals we are here to protect. Our research team conducted a quantitative survey of 500 adults ages 26 to 55 to understand their feelings about insurance companies offering healthy living incentives in exchange for rewards or discounted premiums.

Here’s what we found.

Buyers believe insurance companies want access to their daily data to benefit the company, not the consumer

When asked why they think insurance companies want to collect daily health, fitness and lifestyle data, 42% believed the insurer is looking for ways to reduce the number of claims it has to pay. Only 19% thought insurers track their data to help their insurance customers live a healthier, longer life.

Another 21% believed the insurer is looking for ways to deny their claim versus 19% who believed companies are trying to provide more affordable premiums.

Discounted premiums are appealing… but currently, the industry isn’t offering enough incentive

A leading wellness reward program reports that “initially, clients can save between 5-10%” on premiums with the living benefits rider compared to a non-interactive policy. After the first year, premiums are adjusted based on the rewards status received — meaning they can increase, decrease or remain the same.

The consumers we surveyed identified that somewhere between 11% and 50% is the ideal premium discount they’d like to receive in exchange for their activity and lifestyle data:

  • 47% expect a discount of 11-25%
  • 27% expect a discount of 26-50%

2 out of 3 customers said [fitness activity tracking by an insurer] would encourage them to live a healthier lifestyle

We also sought to understand if the industry’s position that wellness programs will encourage a healthier lifestyle is actually reflected in the viewpoints of consumers.

It is.

But, it does not outweigh their apprehension about fluctuating premiums…

Consumers are wary of fluctuating premium price programs

When identifying customer sentiment toward insurers increasing or decreasing premiums based on how the company interprets health or healthy living, customers reported the following:

  • 45% were uncomfortable with the insurer having the ability to change pricing at any time based on their activity data
  • 37% stated that having their premiums fluctuate up and down would frustrate or confuse them
  • 37% would be incentivized to live a healthier lifestyle
  • 26% worried it will impact coverage affordability if they become less healthy

Many consumers would alter reported data to maximize rewards

Sixty-four percent of respondents said they may or would try to alter their fitness activity tracker data to receive discounts on their premiums. The remaining 36% reported that they would be completely truthful.

Fluctuating premiums and data security lead the concerns on consumers’ minds

When asked to identify their leading concerns about interactive coverage, we found:

  • 57% worried about fluctuating premiums at the insurers’ discretion
  • 56% feared how the data will be used against them in the future
  • 46% worried about companies selling or sharing their data without approval
  • 32% were concerned about hackers getting access to their personal health, lifestyle, and fitness activity information
  • 11% didn’t have any concerns

While there is a promising future for the role wellness reward programs play in the insurance industry in years to come, the survey results indicate that there’s still work to be done in order to reduce apprehension and build trust among the very people whose families and futures we’re responsible to protect. To understand more about Haven Life’s perspective, read today’s post from our CEO Yaron Ben-Zvi.

Haven Life conducted a quantitative survey between October 16 – 22, 2018 and collected N=500 completes. Consumers were between 26-55 and had to have life or health insurance.

Haven Life Insurance Agency LLC (Haven Life) conducted this research for educational/informational purposes only. Haven Life does not provide tax, legal or health advice and the information in the study should not be relied on as such. You should consult your own tax, legal and other advisors, as appropriate.

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About Brittney Burgett

Brittney Burgett is the marketing and communications director at Haven Life, a customer-centric life insurance agency backed and wholly owned by MassMutual. She joined the startup more than five years ago as one of the first ten employees and oversees external communications, content, SEO and various other growth marketing initiatives. Brittney is a passionate leader who believes that managing your financial life doesn't need to be intimidating or complicated and brings that philosophy to all the editorial and brand work at Haven Life. Prior to her role at Haven Life, Brittney worked in public relations, her client list included brands in the tech, food and nutrition spaces.

Read more by Brittney Burgett

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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