Wellness or Rewards Programme? - You Decide
There are two industries that that have been slow to react to consumerism. Airlines and insurance. They maintain often draconian standards and don’t always present an attitude of regard for the customer.
In respect of airlines, think of the annoying situations that arise from time to time of planes sitting on the tarmac for hours while take off is delayed. Returning to the departure gate and unloading passengers to wait in the relative comfort of the terminal is a no no. Or the additional charges applied to excess baggage. A hefty charge for each additional kilo even if you are half the weight of the person in front of you checking in.
Life insurance companies have been slow to adapt to the world of the internet. Maybe not surprising given the fact the industry is legislated by the Life Insurance Act of 1908 (yes - 111 year old legislation). While products have evolved over the years the pricing methodology has been stuck in a model of statistical averages. Therefore, the cost of insurance is based on the claims expectation of the event (think death or diagnosis of cancer etc). For example, the number of men in NZ who die at any given age are used to establish the premiums based on average claims experience. There will also be other known determining factors such as gender and smoking status. Plus taking into account hazardous pursuits or occupations.
What all this doesn’t account for is the individual lifestyle of an applicant or more importantly the future management of wellbeing. Let me explain this further. If twins apply for cover at age 30 and are both issued policies at standard rates that is the last time an insurer will be able to set the premium terms. They will both continue on the standard premium at renewal for as long as they keep their policies. However, if one of the twins has a sedentary life style and poor dietary habits, becomes a smoker and obese it makes no difference to the premium. I’ve had a number of clients who are both active and lead healthy lifestyles question why this is not recognised in their insurance costs.
Well AIA (formerly Sovereign) have partnered with an international organisation to do just that. AIA Vitality is a programme available to both new and existing policy holders. It sits alongside your insurance policies and is supported by an App on your mobile phone that allows you to track your outcomes.
Some describe it as Rewards programme because for just signing up you will receive a 10% discount off your insurance premiums. There are weekly and annual targets that qualify for additional benefits such as Airpoints or Gift Vouchers. There are also discounted services and products available to members.
AIA identify it as a Wellness Programme and think that promoting it will encourage policy holders to both become active and undertake regular lifestyle / health screening services. The expectation being that an active lifestyle will improve overall wellbeing and lead to lower claims. Regular health screening will identify medical issues earlier and allow for early intervention or treatment avoiding major conditions arising.
So how does it work?
There are four tiers of membership - Bronze, Silver, Gold and Platinum. By signing up (there is an $11.50 monthly fee - waived for the first year if joining before November 2019) you immediately get a 10% discount off your AIA policies (there are some exceptions).
Each tier requires collection of 10,000 points. So Platinum is 30,000 points. To retain your 10% premium discount you need to get to Gold standard each year. If you get to Platinum the discount increases by 2% each year until you reach 20%. This is achievable in a 5 year period. If you fail to reach Gold your premium discount will reduce by 1% per year (Silver) or 2% per year (Bronze) until it reverts to Nil.
So how do you get points?
There are two methods; one is Knowing Your Health and the Other is Improving Your Health.
Under Knowing Your Health there are a series of online Health Checks and / or health screenings available that qualify. Points are awarded both for undertaking the test as well as having results in defined healthy ranges. For example
- Online Non-Smoker Declaration - 1,000 points
- Online Age Assessment - up to 3,500 points
- Health Check (either with doctor or pharmacy) - up to 4,000 points
- Healthy Range from Health Check - up to 6,000 points
- Dental Check - 1,000 points
- MoleMap - 1,000 points
- Nutrition Consultation - 1,000 points
- Eye Check - 500 points
Under Improving Your Health your activity is monitored so you need to have an active wear monitor like a Fit Bit or Garmin Watch (25% discounts are available on Garmin products).
- For achieving 12,500 steps in a day you will earn 100 points and can achieve a maximum of 15,000 points in a year
- An alternative to doing 12,500 steps in a day is doing either a 30 minute or 60 minute workout based on your heart rate and effort. This will earn you 100 points.
- If you enter an organised event like a fun run, triathlon, cycle race you can earn up to 1,500 points per event and a maximum of 15,000 in the year.
- Using a sleep monitor if you get over 7 hours sleep you register 10 points per night and can achieve a maximum of 2,000 points in the year
As you can see for those who engage in the programme
the Platinum Tier is not a difficult target to achieve
on an annual basis. In five years’ time some clients
will be paying 20% less on their insurance premiums.
The rewards from the programme include the premium discount on your insurance policies as well as $300 annually in Airpoints (if achieving Platinum) and weekly challenges with $5 vouchers (including Airpoints) available ($260 for the year). There are discounted movie tickets as well as day spas and gym membership discounts.
Is it a Wellbeing or Rewards Programme? - if you
engage in the wellbeing programme the rewards will come
both through the offering and hopefully through a
healthier longer life.
If you want to know how this affects you or if your existing insurance policies qualify call the NZDIS office on 0800 650 149.