John Hancock Insurance customers who engage with the Onduo diabetes management program can get a … [+]
Imagine life insurance that tries to keep you from dying.
A new John Hancock Insurance product for diabetics wants you to put off your encounter with the hereafter by offering cold cash in the here-and-now. Engage with the company’s diabetes wellness program on a continuing basis, and Hancock will cut your life insurance premium by up to 25 percent.
Call it the “delaying death discount.” Buy – but please don’t die.
“Who stands to benefit most if longevity improves? The life insurance industry!” declared Brooks Tingle, president and chief executive officer of Hancock, in an interview. “We’re the only life insurance company in the United States putting our money where our mouth is.”
The Aspire program for diabetics pairs Hancock, a subsidiary of Toronto-based Manulife, with Onduo, a joint venture of Paris-based Sanofi and Verily Life Sciences, a unit of Google parent, Alphabet, which is based in Mountain View, California.
The market they’re targeting is, unfortunately large and growing . There are more than 30 million U.S. diabetics, according to the American Diabetes Association, amounting to 9.4 percent of the population. Moreover, with diabetes now the 7th-leading cause of death, almost half of diabetics are worried they won’t qualify for a life insurance policy or it will be too expensive, according to an online survey conducted for Hancock.
For those diabetic doubters, Aspire is meant to be a sweet deal.
Hancock calls Aspire “a personalized life insurance solution” that’s an enhanced version of the company’s Vitality program. Aspire buyers will be offered “the protection of life insurance paired with a technology-enabled program that provides coaching, clinical support, education, incentives and rewards designed to help manage and improve their health.”
The Onduo offering promotes its ability to “combine Verily’s expertise in miniaturized electronics, analytics, and consumer software with Sanofi’s diabetes program.” Type 2 diabetics in Aspire will be eligible to access Onduo’s virtual care team of diabetes professionals and also receive a blood glucose monitoring device. Guidance on eating and a healthy lifestyle will be accompanied by coupons for discounts on healthy food and similar extras.
“This is really a new kind of life insurance design from the ground up,” said Tingle. ”This is changing the paradigm.”
Disease management and prevention services and products are attracting increasing attention from businesses of all sizes as the $ 3.5 trillion U.S. health care system moves towards “value-based payment” emphasizing cost-effective outcomes.
Hancock currently has about two million life insurance customers, making the potential upside of Aspire obvious. “We really believe that for any American living with diabetes who needs life insurance, this would be the only solution,” said Tingle.
Coincidentally, on the same day Hancock announced Aspire , Alphabet reportedly made a bid to acquire fitness tracker Fitbit, in part as a strategic counterweight to Amazon and Apple. Meanwhile, Sanofi’s increased emphasis on diabetes management comes at a time when its diabetes drug pipeline appears to be shrinking.
In traditional life insurance, actuaries price the product based on data from a large population. A British study from 2010 estimated that type 2 diabetes reduces life expectancy by up to 10 years, while type 1 diabetes reduces average lifespan by at least 20 years.
Hancock’s initial pricing is likely to reflect actuarial caution, but with a twist. Its pitch to diabetics will be that they’re actually overpaying based on the average behavior of their peers. The more the customers engage in the diabetes wellness program, the more their premiums can drop.
The company is charging a nominal two dollars a month for the most expansive version of Aspire, drawing on behavioral economics findings that individuals feel a greater obligation to stick with things they’re “paying for.” However, customers who vow to eat right and go to the gym won’t be charged extra for straying, but rather will pay the old population-based premium.
“Sticks do work, but in our program we just offer carrots,” said Tingle.
About half of all Americans now have at least one chronic disease. Unsurprisingly, Hancock is considering similar products targeting other conditions. “The basic principle at play here, engaging people with chronic conditions and helping them achieve better outcomes, would certainly apply to other conditions,” he said. “This industry has to engage [with consumers] to be relevant.”
He added, “Right now, my ownership experience is paying a bill and dying.”