Wearable fitness devices have become very popular lately. People want to track their exercise and these devices provide the best option to do so. The data recorded by fitness trackers is mostly considered private. However, a decision by one of the oldest insurance companies in the US is raising privacy concerns. John Hancock Financial says that customers who have the so-called interactive policies will only qualify for a discount if they share their fitness data. The insurance company is creating an opt-in feature where interested customers can sign up for the program voluntarily. You can opt out later too if you so wish.
So, what’s an interactive policy? To put it in simple terms, an interactive policy allows the insurance provider to receive extra data on the customer. The data is then used to adjust premiums. For most people, an interactive policy gives you the chance to get extra discounts for your cover by making sure that your provider is updated with all relevant info. Interactive policies first started out on car insurance. If you’re a safe driver, you automatically qualify for a discount on the premium for your car insurance. On the other hand, for drivers who have had many DUIs and traffic tickets, the premiums have increased.
The idea then steadily grew into medical insurance. The UK has been a popular market for interactive health insurance policies but we are starting to see these policies making their way into the US too. From an insurance point of view, having such a plan is a win-win situation. After all, it’s in the interest of both the customer and the company to ensure the client lives a long and healthy life. Besides, the idea that you can get discounts on your life cover premiums by choosing to live a healthier life could be a tempting offer.
Many insurance companies believe that the discounts are designed to emphasize the need for overall wellness. Although logically it can be argued that your insurance company wants you to live longer so that it makes more money from you, if there’s an incentive to adopt a healthy lifestyle then it’s something worth considering.
Life insurance providers give you many options to earn a discount on your premium. For instance, you can take an online nutritional class or make visits to the doctor more regularly. But there could be another option. Wearing a fitness tracker and meeting a set of predetermined goals could also get you discounts on premiums. But there’s one little challenge. In order for the insurance provider to verify that you have indeed met the set goals, you will have to share your fitness tracker data.
In addition to this, insurance companies will still need to determine how accurate that info is since Fitbit data is not always 100% accurate. Insurers are trying to ease these challenges by giving customers the option to decide how much info they are ready to share. The companies are also insisting that this data will not be shared with third parties. However, privacy experts worry that while at the moment these programs are voluntary, it may come a point that life insurance customers will have no choice but to share their data.