Life insurance that rewards you for healthy living

A novel concept but it shouldn’t be – a life insurance program that actually rewards you for healthy living.  I didn’t know much about this new Manulife initiative until I saw the recent media blitz so I reached out to an independent life insurance broker, Glenn Cooke, President, Life Insurance Canada.com to get his inside industry take and answer a few questions.

First, what is Vitality?

Glenn:  This of it as a wellness program.  Live well, eat well, and earn points.  Continue to live well and improve your health status over time and you can qualify for additional rewards including savings on your life insurance premiums.

I found this 2-minute promotional video, check it out:

Video link, Manulife site.

Glenn, is this a new concept for life insurance industry?

This type of program has had great success in the U.S. but it is new here.   I think Canadians should know some practical implications of this new program.

Do tell…

Glenn:  This is not a difference in life insurance.  The life insurance component remains the same.  Meaning, $500,000 of a 20-year term insurance product with Vitality is still a cheque to your loved ones for $500,000 if you die.  Remember that term insurance is just one type of life insurance.  Canadians should also consider permanent insurance – know what you’re getting into here.

So is it a rider of sorts then?

Glenn:  You got it.  Vitality is a rider available on new (not existing) Manulife Term 20 and Term 65 life insurance policies with amounts of $500,000 to $1 million.  The rider costs very little money which I will explain in a bit.  The rider allows you access to additional benefits – those are a potential (not guaranteed) reduction in insurance premiums and secondly, a rewards program.

Regarding the premiums

As mentioned adding the rider will cost you $2/month. Manulife has four levels of premiums. Through a series of specific activities on your part you can accumulate points. Earn enough points in a year and your premium will be adjusted downward.  As you’d expect based, many of these activities are fitness related. Proof of regular exercise will accumulate points towards discounted life insurance premiums. However a surprising number of actions are simply maintenance and monitoring. For example, Manulife will pay to send a paramedic to you once a year to do a BMI and blood test and provide you with the results. That action alone is worth points towards decreasing your premiums. The reasoning is that the very activity of being proactive and monitoring has a measurable mortality benefit which is why fitness is a part of this.

There’s a lower bound on how cheap your premiums can go. Manulife has indicated that they expect you should be able to get some, if not the cheapest premiums in the industry. There’s also an upper bound on the premiums but it’s actually pretty good. If you join the program and do nothing other than gather dust on the sofa then worst case is your total premiums over 20 years will be the same as if you hadn’t joined the program. With that, they’ve made the program all upside – great for Canadians overall.

Regarding the rewards program

They currently have three rewards programs available. I’ve been assured that they are working on many more rewards in the future.  Here’s a list of the rewards:

  1. Free Garmin Fitness Tracker – by joining the program you’ll receive a free Garmin Fitness Tracker. So hey, free Garmin.
  2. Membership discounts at Good Life – Vitality members get 55% off a gym membership at Good Life. With the price of gym memberships these days, a good deal.
  3. Amazon Gift Cards – who doesn’t shop online? Also, by doing some gamification activities on the Manulife website you can potentially earn some small Amazon gift cards. I’m suspicious that this was invented so that the marketing department could use the terms ‘disruptive’ and ‘gamification’ but heck I’ve always been a skeptic.

I don’t have the complete inside track at Manulife but I would expect to see some partnerships with national retailers in food and pharmacy at a minimum, so stay tuned.

Mark:  Thanks for this Glenn – seems like a great new initiative.

Glenn:  You’re welcome Mark and if you or your readers want more details about Vitality or any other independent take on insurance products, I’m happy to oblige.  See you here again soon.

Glenn Cooke is a life insurance broker and president of Life Insurance Canada.com Inc.

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and I'm now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Subscribe and join the newsletter! Follow me on Twitter @myownadvisor.

8 Responses to "Life insurance that rewards you for healthy living"

  1. I like this rider. It rewards people who are actively trying to give the good life without punishing those who has a genuine debilitating disease/injury and cannot work as hard to stay healthy.

    Reply
  2. I recently cancelled the term policies we had as our assets are more than enough to cover expenses in the event of death. The only fly in that ointment is that the DB pensions only have a 50% survivor benefit so we kept the insurance that came with the pension. It was relatively cheap and will make up for the reduction in the event of death. Certainly if one has financial obligations (mortgage, other debt, etc) then insurance to cover that would be the prudent and smart thing to do.

    Reply
    1. We have the same challenges with our pensions. I think this is a good initiative by Manulife but I’m not sure it will change what we do with life insurance in another 20 years. I fully believe folks with mortgages, debt, etc, – to cover lost income and help your family life insurance is a smart thing to do.

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      1. I should have added a disclaimer….We have significant stock in MFC so anything they can come up with to improve the bottom line is good with me.

        Reply
  3. As we were mostly self-employed I felt Life Insurance was necessary, but as soon as I retired I dropped all insurance. They wanted $5,000 per year for $250,000 coverage and it would go up as I aged. Been 12 years so we’ve saved at least $60k and more if one considers that we’ve invested the money.

    Reply
    1. Once our mortgage is gone and once we have a healthy nest egg intact we will drop all life insurance as well. We’re a long ways away from dropping life insurance though since we have debt and we need income replacement.

      Thanks for sharing cannew.

      Reply

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