Would you lead a more active lifestyle if it meant lower life insurance premiums? Insurer John Hancock and Vitality, a global wellness firm, are hoping the answer is yes. But there is a condition: They get to track your activity.
The practice is already employed in Australia, Europe, Singapore and South Africa, where Vitality is based.
Here's how the program works: Once you sign up, John Hancock sends you a Fitbit monitor as one way to track your fitness. You earn Vitality Points for your activities. As you accumulate points, your status rises — from bronze to silver to gold to platinum. The higher your status, the more you save each year on your life insurance premiums. The points also allow you benefits at stores like REI and Whole Foods as well as hotel chains like Hyatt.
The New York Times, which first reported on the announcement, notes that the most active customers can earn discounts of up to 15 percent on their premiums. The company in a news release says:
"For example, a 45 year old couple (of average health) buying Protection UL with Vitality life insurance policies of $500,000 each could potentially save more than $25,000 on their premiums by the time they reach 85, with additional savings if they live longer, assuming they reach gold status in all years."
But as The Times notes, if customers don't maintain their gold status for any reason, the premiums could increase by 1.1 percent to 1.6 percent each year. Those who reach platinum status will see premiums fall by about 0.30 percent each year, the newspaper adds.