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Understanding behaviour-based life insurance

Help your clients connect with the benefits of Manulife Vitality.

People are generally aware that maintaining healthy habits can add years to their life. But what’s considered common knowledge today hasn’t always been familiar – and convincing some people to adopt a healthier lifestyle still isn’t simple and straightforward. 

As a society, we’ve taken big strides in life expectancy, with the average Canadian now living to 82.[1] And, while the pandemic drew that number back a bit, it had little effect on the widespread expectation that people will continue to live longer in the future.[2] 

The federal government’s profile of the effects of aging and chronic diseases on senior citizens says a person aged 65 can expect to live another 21 years. On the surface, living longer should be welcome news for life insurers and policyholders; however, it’s also estimated that only 15 of those 21 years will be lived in full health.[3] Chronic diseases leave 73 per cent of seniors living with some degree of disability.[4] 

Moreover, 44 per cent of adults over 20 are already living with a chronic disease.[5] Currently, four chronic conditions — cancer, cardiovascular diseases, diabetes, and chronic respiratory diseases — account for 60 per cent of all deaths in Canada.[6]

While these numbers form a dark cloud of concern, there is a silver lining: people can delay or alleviate the onset of these diseases through changes in personal behaviour. For example, the main treatable cause of mortality in 2019 was cardiovascular diseases (mainly heart attack and stroke), which accounted for 36 per cent of deaths from treatable causes. Effective, timely treatment for cancer, such as colorectal and breast cancers, could have averted 27 per cent of all deaths from treatable causes. Respiratory diseases, such as pneumonia and asthma (9 per cent), and diabetes and other diseases of the endocrine system (8 per cent) are other major causes of premature death that are responsive to treatment.[7] The main challenge is helping people avoid chronic diseases before it’s too late. This is a tall order, however, given that many people underinvest in their own health. 

A new approach 

As a society, and as individuals, we’re wired for the here and now, making it tougher to adopt a proactive mindset that invests in the present to achieve a future benefit. The absence of timely incentives or rewards can make better, long-term choices for our health difficult. The life insurance industry recognizes the challenge of changing this common mindset.

The industry’s efforts to promote healthier living have had some success, but the programs have only brushed against the edges of the broader ideal. For the most part, policies old and new are still built on static individual risk information: point-in-time rating factors collected at the time of application that determine premium and payout calculations. Changes in a policyholder’s health or risk profile – in either direction – aren’t readily accommodated and, therefore, less progress has been made to deliver life insurance products that reflect or actively incentivize choosing a healthier lifestyle.

The future of life insurance calls for a fresh vision – one that leverages all the momentum, evidence and tools available to offer insurance and protection options that make sense for our times. In other words, aligning coverage with healthier living and the benefits of disease prevention. This is where Manulife Vitality comes in – a shared value approach to insurance where dynamic premiums deliver the economic value of maintaining good health directly to policyholders.

Chart: Why shared value works - a virtuous cycle

Change with a “nudge”

It’s clear that reducing the incidence of chronic diseases can yield the next major leap in healthy life expectancy. Such a reduction will require people to modify and sustain their personal health-related behaviour. At the individual level, making effective and lasting change is hard. Changing the behaviour of an entire society is even harder, but there is a way.

Understanding how people make decisions is powering a new approach. Insurance is increasingly using data and behavioural science insights to ignite positive, ongoing change in the health of individuals. 

The use of short-term incentives, when applied to insurance and health improvement, can put people on the path to more positive lifestyle choices. A well-timed, well-framed, integrated series of small steps can lead to real progress and lasting change.

Change with a “nudge” means starting the process with a suggestion in the form of an appealing incentive, then encouraging the person to adopt the change as a new behavioural direction by providing continuous and equally appealing incentives. 

Offering incentives that are within reach of policyholders who adopt an active lifestyle, Manulife Vitality provides access to a broad range of wellness and prevention options, along with the ability to earn lower premiums. 

By providing immediate rewards for healthy choices (for example, going for a jog or attending an annual physical), short-term rewards are linked with long-term goals. The aim is to enable engaged consumers who strive towards the next accomplishment and the reward that comes with it. Manulife Vitality provides this opportunity for dynamic, progressive engagement on an individual, customized basis, regardless of the client’s initial state of health or activity level. Although it’s highly sophisticated, data-driven and complex in its actual design, the consumer experience is extraordinarily simple and appealing.

Behavioural insurance will move the dial on two fundamental changes:

  • A move from static to dynamic pricing. The evolution of pricing based on more frequent and individual health inputs offers the potential for more efficiently priced premiums that can result in savings for the policyholder.
  • Improved mortality. As policyholders engage in positive health and wellness management, their life expectancy improves, resulting in improved mortality and the opportunity for premium savings.

A new outlook for policyholders

Manulife Vitality can empower current and future policyholders to realize benefits in both their health and their ability to get the most out of their life insurance protection. Incentives are a practical way to help people become aware of, monitor and manage their health risks. Everyday activities offer an opportunity to earn rewards just by making healthy choices, while also influencing their insurance costs.

Benefits for advisors 

As insurance changes for the benefit of policyholders, the role of insurance advisors is also evolving. Today, it’s more about a comprehensive approach that focuses on building relationships with clients who want an advisor’s help finding a solution that best meets their needs.

For advisors, taking a shared value approach offers three key benefits:

  1. Broader market appeal. Unlike traditional insurance, clients can interact with Manulife Vitality and experience its benefits immediately.
  2. More satisfied clients. With Manulife Vitality, clients don’t just own their insurance, they experience it daily. As a result, they may feel differently about their insurance and about you, which can help enhance customer satisfaction across the board. 
  3. Stronger relationships and better business outcomes. Manulife Vitality is founded on engagement. Advisors have multiple opportunities to reach out to clients and see how they’re doing. This ongoing interaction can help build stronger client relationships, leading to fewer lapses and increased referrals, as well as improved cross-selling and upselling opportunities. 

The future has arrived

Life insurance has always adjusted to developments concerning public health. Once the COVID-19 pandemic, for instance, became a global crisis, insurers responded swiftly, offering coverage for the various ways people could be affected, including life, disability, critical illness, and travel. 

Similarly, Manulife Vitality is responsive to consumer trends that are leaning towards enhanced value. It enables people to adapt their policies to their own circumstances and directly rewards them for taking positive steps towards improving their health.

Manulife Vitality is a solution to what once was a distant vision to actively engage and help people live a longer life in good health. The future of life insurance has clearly arrived. 

The Manulife CE Centre now offers the How Manulife Vitality creates value course, which can help you learn ways both you and your clients can benefit from Manulife Vitality. 

Manulife Vitality works

In just one year:

  • 11 per cent of members reduced their body mass index (BMI) 
  • 31 per cent lowered their blood pressure
  • 26 per cent improved their glucose level
  • 21 per cent improved their cholesterol levels

Overall, 82 per cent of members are satisfied with the Manulife Vitality program — a measure that continues to climb each year. 

[1] OECD (2021), Health at a Glance 2021 

[2] Statistics Canada. The Daily. Reductions in life expectancy directly associated with COVID-19, 2020

[3] Ibid.

[4] Ibid.

[5] Ibid. 

[6] Ibid.

[7] Ibid.

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