Think about it: With over $20 trillion of life insurance in-force in the United States alone, wouldn’t you expect more life insurance companies to be devoted to helping their policyowners enjoy long and healthy lives? Apart from making an inspirational mission statement, this might also help us to set more ambitious goals around reinventing the life insurance customer buying experience.
There has been a lot of industry focus recently on “fluidless” or “non-invasive underwriting.” Trading underwriting accuracy for small improvements in issue speed just doesn’t seem to go far enough toward truly reinventing the customer experience.
We believe that the best way to improve the customer experience is by embracing ongoing wellness exams using convenient point-of-care diagnostic tests that generate immediate results. This strategy delivers protective value at the point of sale AND continuously throughout the life of the policy by supporting incentives and discounts for ongoing participation in wellness exams and monitoring.
Why routine wellness exams
A November 2014 Kaiser Foundation survey representing U.S. adults found that 62 percent of respondents reported having an annual exam by a doctor. And 92 percent of respondents considered these wellness exams to be somewhat or very important.
Even if we adjust this number closer to a 2007 study, which estimates that over 45 million routine wellness exams are performed in the U.S. each year, the figure is still over four times the roughly 10 million exams conducted by life insurance companies. And the cost of preventive wellness services are fully reimbursed by most health insurance plans sold in the U.S. without applying deductibles or copays.
In May 2016, the Equal Employment Opportunity Commission (EEOC) issued final regulations regarding levels of discounts employers can offer on employee health insurance premiums for participating in wellness programs. The maximum discount is now 30 percent of premiums.
Those familiar with typical health insurance premium levels will recognize that this amounts to potential savings of more than $1,000 a year and those discounts can be applied to premiums for both participating employees and participating spouses. According to the “2016 Benefits Report” of the Society for Human Resources Management , 72 percent of U.S. employers now offer wellness programs. That’s up from 58 percent in 2008. The percentage continues to grow rapidly.
The healthy life product strategy should feature integration of ongoing wellness exam data with all of the leading fitness and health tracking wearables and health monitoring devices. (Photo: Thinkstock)
Clinics and wellness plans as distribution partners
It’s no secret that health plans eager to reduce costs are squeezing doctors’ fees in all specialties. The two key components of a typical wellness exam are (1) a health risk assessment, or set of health and behavioral questions similar to Part B of a typical life insurance application but designed to be much more helpful; and (2) biometric screenings (aka diagnostic tests).
Point of care diagnostic tests using a pin-prick of blood and saliva samples make biometric screenings quick and painless. Immediate testing also means that a clinic can connect patients with pre-approved life insurance offers based upon a just completed wellness exam. And the referral fees can go a long way toward making routine wellness exams more profitable for the clinic.
Healthy life app
The healthy life product strategy should feature integration of ongoing wellness exam data with all of the leading fitness and health tracking wearables and health monitoring devices, along with a mobile app to provide comprehensive analytics dashboards, reminders and health advisory services. Social competitions or “challenges” where the customer can join with friends to set and reach new activity goals have also been very successful particularly when combined with “rewards” programs.
We are also starting to see a wide array of wearables and services designed to help manage chronic diseases from diabetes and heart disease to depression and services designed to help kick bad habits.
We are at a crossroads in the life insurance industry. In the face of rising numbers of insurance age consumers, the ACLI tells us that we sold 25 percent fewer policies in 2014 than we did in 2004. The good news is that the healthy life product strategy provides a solution that delivers both a fast, fully automated immediate issue process and the protective value that supports low cost protection.
Authors: Michael P. Curran, CEO, Force Diagnostic, Inc., Brian G. Mulconrey, CLU, ChFC, co-founder and advisor to Force Diagnostics, Inc., and Chuck Ritzke, FSA, MAAA, president, Problem Solving Enterprises, Inc. and actuarial advisor to Force Diagnostics, Inc.