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Breaking Down the NEW John Hancock Vitality Rider

By now, you’ve probably caught wind of John Hancock’s announcement last week about their revolutionary new Vitality rider, currently available on a selection of their life insurance products. In an unprecedented event, Hancock rolled out the rider amid fanfare with a live press conference (complete with celebrity guests). The New York Times and NPR also picked up stories about this new feature, and already it seems to be generating an impressive amount of consumer buzz, and understandably so; for one of the first times in industry history, a life insurance carrier has directly developed a response to the needs of the general public.

In a nutshell, the rider’s goal is to “help clients save money and earn valuable rewards by simply living a healthy life”. The rider, which is able to be attached to a selection of John Hancock’s permanent and term portfolio, allows clients to earn “points” for everyday things they do that keeps them healthy. Examples of this include exercising, getting annual health screenings, staying tobacco-free, and maintaining acceptable levels of certain health-related criteria, such as body mass index (BMI), blood pressure, cholesterol, and glucose readings. Earning requisite amounts of points lets clients achieve a “Vitality Status”; Platinum, Gold, and Silver levels of participation, each with a more competitive annual premium discount factor. John Hancock has stated that clients who maintain Platinum (the highest status available) can save up to 20% on their annual premium payments. And as an added bonus, John Hancock is providing a free FitBit activity tracker to each policyholder as part of the deal, and the information captured by the device can be used by the client as confirmation of program points earned.

By all accounts, the new Vitality rider definitely has all the markings of a game-changer in the industry. But is it really the “next evolutionary step” of life insurance?

Short answer? It’s probably too early to tell. However, John Hancock thinks it is, and we agree that the program most definitely has merit. After all, how many of you use a credit card that accrues points, or miles? How many of you have frequent flyer miles on your preferred airline, hotel loyalty points, or get a “safe driver discount” by installing a small device in your car? All of these programs are “incentive programs” – programs which have been proven to increase customer loyalty and engagement by encouraging active participation on the part of the customer. These programs have been a resounding success with other parts of the consumer experience – so why not with life insurance?

Ultimately, the collective consumer experience (which includes retail life insurance customers) seems to be gravitating towards products and experiences that offer heightened feedback, transparency, and engagement opportunities between companies and their customers. The life insurance industry has been no exception, and has introduced features such as living benefit and accelerated benefit riders in an effort to offer more value and customization options to policyholders. John Hancock’s new Vitality program definitely seems poised to take this flexibility to the next level.

While this is still a very new program, we feel that it holds a lot of promise for both clients who put their health first (and want to reap the rewards) and the industry as a whole. We’re excited about it, and we hope you are as well. Give your Zenith Sales Team a call today to find out more.

About Mike Gorlick

President & CEO, Zenith Marketing Group, Inc.

One comment on “Breaking Down the NEW John Hancock Vitality Rider

  1. I don’t really expect John Hancock’s new product to change the marketplace. It is a way of making a fairly simple thing extremely complicated. The purpose of insurance, in general, is to transfer risk for a set premium. During the recession of the early 1990s some insurance companies which had been selling Non-Cancellable and Guaranteed Renewable Disability Income insurance decided to help the consumer by switching to policies which were still Guaranteed Renewable but which no longer had guaranteed premiums. The strategy did not work, There was no benefit for the consumer and sales of the new products went nowhere. The fact that computer software allows an insurance company to change its premiums every 15 minutes doesn’t mean it’s a good idea. It just means they can do it. The last insurance company to try to mix “lifestyle” considerations and Term Life underwriting in any big way was CNA. At one time CNA had 9 or 10 underwriting classifications. In states like NY which were slow to approve new policy forms or premium schedules, CNA’s system allowed it to simply change an applicant’s classification to stay competitive. CNA nearly cornered the marked for Term Insurance but got out after it couldn’t make any money doing it. The idea that with new technology an insurance company can tell when someone might die within a ten minute window is kind of silly. God might know this. An insurance company wouldn’t. In the future John Hancock will be stuck with this block of business. It will be so complicated to administer no other company will be willing to take it off their hands. Finally, there is the issue of privacy protection for the vast amount of confidential medical information the insurance company will be responsible for. A week or so ago the White House computer system was hacked into. Will the Secret Service also protect John Hancock’s data?

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