Would you wear a tracker to get an insurance discount?

[gadgetrants]

At CNN-Money -- kinda Band-related and pretty interesting.

Would you wear a tracker to get an insurance discount? - Apr. 8, 2015

Would you wear a tracker to get an insurance discount?

​For the first time ever in the United States, a life insurance company is offering a discount -- if you're willing to let it track your health, location and body.

It was only a matter of time.

It's increasingly popular to wear a fitness tracker that measures your footsteps, heart rate or body movements. Now, the life insurance company John Hancock is offering deal if you'll wear one: 15% off in some cases.

The company unveiled its optional, new program Wednesday morning. John Hancock is partnering with Vitality, which many people probably know as one of those work-related wellness programs. The program is available in 30 states.

If you sign up for this, John Hancock will send you a free Fitbit monitor. That's a tiny, pill-shaped device that some people wear in sleek-looking bracelets to track how far they walk/run, the calories burned, and the quality of sleep.

That means the insurance company would know exactly when a customer does a sit-up, how far she runs -- or when she's skipped the gym for a few days.

The program works like other "customer rewards" programs at restaurants and retailers. Your actions earn points that place you in one of three levels -- silver, gold or platinum.

The healthier your lifestyle, the higher you go, and the steeper the discount. And it changes as your health data gets analyzed.

Points can also qualify customers for discounts at Hyatt (H) hotels, Royal Caribbean (RCL) cruises,Whole Foods (WFM) grocery stores, and REI outdoor gear stores.

"We're introducing a whole new approach for life insurance that rewards and recognizes people for healthy living," said Mike Doughty, John Hancock's president, at a presentation in New York City on Wednesday.

First, the upside: That 15% discount might amount to about $91 a year. Life insurance is generally much cheaper than health insurance, and this program could make it even less expensive.

But it's not much of a reward for wearing a leash all year.

That's based on data from independent insurance agents at Trusted Choice. Industrywide, the average cost of a $500,000 term life insurance policy for a 65-year-old, non-smoking man is $611. It's slightly cheaper for women of the same age, so the savings are smaller.

At Wednesday's event, Vitality marketing executive Tal Gilbert said people are hard-wired for short-term rewards, rather than things that have a longer term impact.

"The idea is to give you much more immediate payoff," Gilbert said.

It's the insurance industry's way of trying to incentivize people into buying life insurance.

But there are immediate privacy implications.

First, the pendulum swings both ways. If you don't exercise that tracker will rat you out -- and you'll lose the discount. Trackers are simply a way for insurance companies to more accurately judge you. And as they get more accurate (measuring cholesterol, blood sugar levels), so will the judgment.
​
Second, that personal data -- your heart rate, preferred exercises, what gym you visit and when -- ends up on insurance company computers. And these databases are a target for hackers, who steal this information and sell it on the black market to identity thieves and fraudsters.

CNNMoney has just asked John Hancock where the data will be kept, and whether it will be sold to other companies. The company has not provided an immediate reply.

This past winter, insurance giant Anthem was hit by massive data breach when hackers snuck into its computers. Shortly after that, the large American insurer Premera revealed that hackers broke into its computer systems too -- and that of Vivacity, a work wellness partner.

 

[Ruined]

No.

 

[cbmago]

Only 15% off? No.

 

[MBY]

This seems like a big-brother nightmare full of all kinds of slippery slopes. It also seems like it would give the insurance company evidence it could use to contest claims.

 

[CliveSinclair]

It would mean you allowing a profit making company access to your FitBit, Microsoft Health, or any other system login details (how else would they know the activity metrics?). If anyone is stupid and I do mean stupid enough to do this, then they deserve every spam email, phone call they get.

It's bad enough that these companies steal data, let alone con people into giving it them.

 

[DroidUser42]

Not willingly, but if it meant the difference between having health care insurance and not....

At only $91/year, I don't know as this is a serious effort as much as it's testing the waters - both consumer reaction and legal reaction. It's setting precedence for what's to come.

I would like to see legal protection in that such information can only be used to set rates on renewal and can't be used as a basis of claims except for proving fraudulent claims

This all is reminding me of a episode of Pawn Stars where one of the guys in effort to not lose a bet puts his fitness tracker on a paint shaker.

 

[920Walker]

Hell no. I wouldn't wear one under their terms if they offered FREE (fine print) life insurance. There's always a catch. Until the day vehicle and personal trackers are a requirement I'm staying unplugged, except for a phone. It's mine and there is no penalty for turning it off, leaving it behind or ignoring it.
Would putting the tracker on my dog be fraudulent? I wouldn't put him through that either.

 

[NBrookus]

There's a smidgen of journalistic hysteria here: it is not going to track your location. Can't: only the FitBit Surge has GPS and then only when you turn it on, when it lasts for about 4 hours.

That said, the pertinent data already basically exists in medical records. This is just an insurance company trying to get permission to access it via the camel's nose. These devices are really easy to fool if that's what you want to do and offer very little real data on life expectancy in the short term. Activity could as easily be negative for a particular individual: that elderly guy trying to get his exercise in for a discount could push himself too hard, right into a hard attack... or require a knee replacement... or burst that undiagnosed aneurism. And none track swimming or water exercise, which is very friendly to the elderly.

It's only a matter of time before all those grocery loyalty cards feed data about the food you buy to your health insurance company -- unless consumers stand up for their privacy rights and refuse to allow it.

But anymore it seems people are willing to allow everything to be for sale, including themselves.

 

[Red River]

I'm thinking insurance company may use your own data to decline your claim. Or maybe they will raise the fee once they find you only sleep 5 hours a day. LOL.

 

[gadgetrants]

I guess I have mixed feelings about the whole idea (and remember, I'm tremendously naive and idealistic). First, I'm kinda proud of the fact that I don't drink or smoke (OK well, let's overlook that generous shot of tequila I enjoyed while cooking last night!). Add to that I'm definitely scared straight after seeing what those habits did to my parents, who enjoyed the 60's and 70's a bit too much.

Second, when I bought a term-life policy, I had the nursemobile come and take all the normal blood/fluid samples. In principle -- hey, it's a private company -- I'm absolutely fine with being put in a risk group based on my age, health, and family-history factors, and paying according to how much of a risk I am of keeling over from a heart attack (or conversely, living until 94). That's how the free (insurance) market works, right? (Turns out I'm pretty liberal and prefer the idea of socialized medicine/health coverage, but let's not get political about it, and I already said I'm naive, right?)

So bottom line is I have no problem with strapping on a device like the Band and sending the data to an insurance company. Like @NBrookus noted, my insurance company already knows an awful lot about me (as do many other agencies I suppose). HOWEVER, what I'm not cool with is things like them selling my data or a hack/breach. In other words, until there's a way for me to confidently control who has access to my personal data, and a guarantee that it won't get stolen -- which are both seemingly impossible -- count me out. Especially count me out for $91 a year.

But the concept of paying less for insurance because I make good lifestyle choices is a no-brainer...works that way for car insurance (e.g., good-driver discounts), home insurance (e.g., fire and security alarms), etc. Too bad there's no way to separate the "lifestyle" part from the "personal privacy" part.

​-Matt

 

[DroidUser42]

I think one of the problems I have is how accurate that information is. It seems like the advice of what is good and what is not changes weekly. This week, it's Why Some Think Lowering Salt Intake May Do More Harm Than Good. Remember how eggs were bad for you, then now they're good for you? I'm not entirely sure that the insurance companies know how to use the information properly. But that won't stop them from trying.

 

[JoeHempel]

no brainer to me. I'd wear one.

In fact my employer already gives me a discount because I'm preventative, and live a healthy lifestyle. The discount is no joke either, it's close to $100 a month.

 

[jgbstetson]

I'd wear one because I think this creates value for individuals and companies alike. It incentivizes healthy living, it will drive refinement of the technology, I lower my costs, and it gather mountains of data, which can really be useful for all parties. Now, I don't think GPS data should ever be gathered. And what would criminals do with your average mileage linked to your insurance ID? As long you keep my sensitive information locked away from this data, I'm Ok with it. Our healthcare costs are skyrocketing in the US, and people that try hard and live healthy lives are weighed down by those living on cheeseburgers and sweet tea. No accountability there.

 

[jlzimmerman]

But there are immediate privacy implications....If you don't exercise that tracker will rat you out.

"Why have you denied by claim?"
"It says here you are a smoker"
"I don't smoke!"
"On our records it indicates you visited a Smoke In cigar shop on January 15."
"It was a bachelor party."
"I'm sorry, Mr <your name>, our policy has denied your claim based on your visit."

Insurance companies wouldn't be offering this type of "incentive" if it didn't benefit them in the long run. They are not in this business out of the kindness of their hearts. We are a number. They are here to make money.

It's bad enough we already have to worry about be data mined to death by entities like Google, NSA, and Verizon.

 

[snowmutt]

I would not use snap shot from progressive.

I do not allow the vast majority of my apps to chart my location. I shut them off or ditch them if they insist. (Obviously, maps and some GPS dependent apps are exceptions.)

I fully realize that at 45, I am a tad more defensive about this than my kids (21 and 23) are. They grew up with this, and are fine with the whole "the world is watching" mentality. But if companies can get your permission, they will find a way to cash in on the information and deny paying their claims one way or another. I pay them for a service. I am not worried about passing physicals or answering questions. But being tracked??? Access to my health at their whim??

Nah. I will simply shop around and find a better deal.

 

[gadgetrants]

I fully realize that at 45, I am a tad more defensive about this than my kids (21 and 23) are. They grew up with this, and are fine with the whole "the world is watching" mentality.

I totally get this. In my early 30's, I suddenly became keenly interested in conspiracy theories, and developed a deep mistrust of "the system", probably due to watching every single X-files episode! So the rational part of me perfectly realizes that insurance companies and everyone else out there isn't concerned about the little guy. On the other hand, I've been collaborating a bit with a startup in the same general sector as the Band (personal health) and get to hear what the daily conversations and long-term planning look like. Maybe the small fish are different from the million/billion-dollar businesses, but I'm impressed by how much plain human common-sense goes into the decision-making. Their number one priority is to stay afloat, but they're far from interested in exploiting their customer base. They're painfully aware that if they intrude too far into the personal privacy of families, or burden customers with too much data collection, they'll lose the business. I think even for-profits understand that you have to strike a delicate balance between the almighty buck and keeping the customer happy.

-Matt

 

[mparkkon]

yes - if the discount would be significant enough (like 30%) and the company would be guarantee that the information would not be shared among other companies and deleted after one year.

 

[chuckdaly]

Even if there was no danger or selling my data, I still would not use one. The additional information provided, only gives the insurance companies more ways to deny claims or raise rates. Once enough people use them, they will penalize those that don't. Cars are much safer today, auto deaths have been declining since 2005, and auto thefts are down, yet auto insurance premiums have gone up or remained stagnant. So there is good reason not to trust insurance companies.

 

[snowmutt]

I suddenly became keenly interested in conspiracy theories, and developed a deep mistrust of "the system", probably due to watching every single X-files episode!

That made me giggle....

And also hit a little too close to home. :wink:

 

[jgbstetson]

Even if there was no danger or selling my data, I still would not use one. The additional information provided, only gives the insurance companies more ways to deny claims or raise rates. Once enough people use them, they will penalize those that don't. Cars are much safer today, auto deaths have been declining since 2005, and auto thefts are down, yet auto insurance premiums have gone up or remained stagnant. So there is good reason not to trust insurance companies.

What you see as people being penalized would actually be people choosing not to participate in an incentive program. They are not victims. Also, consider that vehicles have become increasingly complex due to tightening government regulation and our demand for technology. I just had a rock crack the radiator on my Volt. The whole front end had to come off...$1200. The part was $250. I went through insurance. If that happened to my first car, I would've replaced it myself.