John Hancock Life Insurance Co. plans to try out a number of wellness programs on some of its long-term-care insurance policyholders, which experts say would both help clients live longer, healthier lives and possibly provide an economic prop to one of the largest LTC insurers.
The first of the pilot programs, the LIFT Wellness Program, involves an in-home visit by a registered nurse, who will "conduct an assessment, and may recommend certain behavior changes related to nutrition, exercise and/or home modifications with a focus on fall prevention," according to a letter sent to advisers last month by the insurer and obtained by
InvestmentNews.
The assessment will be followed by regular health coaching calls over the course of the year, the letter said. The program, which is being offered to a subset of existing customers, is voluntary, free, and won't impact policy status, benefits or premium amounts.
The pilot complements the
rollout of a new strategy this month to extend a John Hancock program called Vitality to all existing and new life insurance customers. Vitality, which had previously been available to a subset of clients, incentivizes policyholders to live healthier lives with rewards such as discounts on Amazon.com and, in some circumstances, reduced premiums.
John Hancock's goal with its initial pilot program, the letter said, is to gauge interest, effectiveness and to come up with ways to make improvements for future programs, with the ultimate aim of developing a "comprehensive health and wellness program for all our LTC policyholders."
"I am shocked at how aggressive it is. But it sounds wonderful," said Scott Olson, a long-term-care broker and co-owner of the LTC Shop. "Nobody wants to use their LTC policy. If we can prevent it and [help clients] improve lifestyle and stay at home longer, why not do it?"
John Hancock is the third-largest underwriter of traditional long-term-care policies, covering about 1 million individuals, according to the most recent data from the American Association for Long-Term Care Insurance. The firm stopped selling new traditional LTC policies early last year, citing "macro-economic trends facing the long-term care insurance industry."
LTC policyholders have been plagued by a slew of premium increases, necessitated by a decade of rock-bottom interest rates and actuarial mistakes insurers made when underwriting policies a few decades ago. Since 2016, John Hancock has requested an average rate increase of 20%, according to spokeswoman Melissa Berczuk.
States have taken measures to try reducing these increases. But now, it seems insurers such as John Hancock are seeking out alternative ways to shore up their economics.
"The easiest thing to do is raise premiums," said Gregory L. Olsen, a partner at Lenox Advisors Inc. "If [John Hancock] can attack this in a creative way, that's a win-win [for the policyholder and insurance company]."
If clients live longer, healthier lifestyles due to John Hancock's pilot program, the insurer also benefits from a reduced number of claims and longer duration of premium payments from customers, said Mr. Olsen. One of his clients has the opportunity to participate in the program, which he said he'd be recommending "without question."
Other insurers such as
Transamerica Life Insurance Co. and Genworth Financial launched wellness-type programs within the last several years, but they're based more around education and preventative screenings, said Mr. Olson of the LTC Shop.
"This LTC pilot program is an initial effort to explore a different way to possibly help our policyholders live longer lives in better health and with more independence," Ms. Berczuk, the spokeswoman, said. The pilot program, which hasn't been previously reported, began in April, she said.
If John Hancock's strategy to encourage healthy behavior works, it's likely other insurers will begin debuting similar services, experts said.
"They're copycat companies — if something works, other companies follow and do it," said Mr. Olsen of Lenox Advisors. "I absolutely think other companies will come if they see John Hancock is being successful."
