Wearable medical devices such as the Fitbit are making increasing inroads into all aspects of life. Corporate wellness programs are embracing them as a way to encourage activity. In some cases, incentives may be provided to employees who meet certain activity and other health targets.
Insurance companies are also getting more interested in collecting biometric data from customers via wearable medical devices and other forms of monitoring. For example, John Hancock now offers "interactive" life insurance policies, under which customers can submit to optional fitness and activity tracking via wearable devices and smartphones.
Tracking is optional, but policyholders who participate, and who meet activity objectives as recorded on their devices, receive discounts on their insurance premiums. They also receive gift cards from participating merchants and other perks if they log their workouts via a mobile device app.
John Hancock announced this fall that all their future life insurance policies would feature this option.
Other insurers are not far behind: In addition to life insurance companies like John Hancock, medical, disability insurance and long-term care insurance carriers are all looking into leveraging this tech to control costs and inform pricing.
For example, Humana, a nationwide health insurance carrier, has launched the Go365 program that pays policyholders to complete verified workouts via the Medicare Silver Sneakers program, or by wearing an activity tracker.
United Healthcare's Motion program, marketed to employers who want to decrease their own health care expenditures, issues free trackers to employees and allows them to earn up to $4 per day in health reimbursement account contributions.
Even car insurers are getting into the act: Progressive allows customers with good driving habits to earn discounts by tracking their driving using a mobile app called Snapshot. On the other hand, those with poor or risky driving habits as documented by the app may see their premiums increased when their policy is renewed.
But, the practice raises some important disadvantages and policy issues:
The practice is still in its early stages. Insurers, regulators and legislators are looking carefully at how to balance the sometimes competing priorities of affordability, efficiency, privacy and the accessibility of insurance. And industry analysts are concerned that some customers may engage in fraud by having someone else use their Fitbits.
Should you participate? That's a personal decision. You will have to decide for yourself whether the discounts and perks outweigh your privacy and security concerns.