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Business News/ Money / Personal Finance/  Beyond coverage: 4 common wellness benefits of life insurance

Beyond coverage: 4 common wellness benefits of life insurance

Insurance plays a larger role in individuals' lives by offering customizable options and integrated wellness programs. Wellness initiatives lead to reduced medical claims, enhanced customer experience, and cost savings, reflecting a growing understanding of healthier individuals.

Wellness programs in insurance aim to encourage healthier lifestyles, leading to fewer medical claims and cost savings. Premium
Wellness programs in insurance aim to encourage healthier lifestyles, leading to fewer medical claims and cost savings.

According to the recent report issued by IMARC group, the health and wellness market is expected to exhibit a growth rate (CAGR) of 5.55% during 2023-2028. Furthermore, the demographic dividend in India, with 68% of the population being young and 55% falling within the working-age group of 20-59 years, presents a vast pool of insurable individuals.

The role of life insurance extends far beyond merely providing financial coverage or lump sum payment in the event of sudden demise; it plays a larger role in individuals' lives. The shift is remarkable, and insurers are striving to elevate their understanding of customers as individuals with unique needs and circumstances. 

Also Read: Term Life Insurance: Why should you not buy a return-of-premium option?

By offering a range of customizable options and integrated wellness programs, insurers enable policyholders to tailor their coverage to fit their specific lifestyle, ultimately promoting overall well-being rather than only focussing on specific triggers or events. The proposition is to provide a positive impetus to overall wellbeing getting embedded to the customer life cycle management process thereby driving better value offering to customers across segments. 

The rise of wellness initiatives is not merely a passing trend but rather a reflection of a growing understanding that healthier individuals lead to reduced medical claims, enhanced customer experience, and cost savings.

The benefits of wellness programs

Wellness programs have gained popularity in recent years, offering a range of physical, mental, and emotional benefits for policyholders. The COVID-19 pandemic has underscored the vital role of insurance in protecting individuals' well-being and ensuring their financial stability in uncertain times. 

With a youthful population, increasing levels of disposable income, growing financial awareness, and supportive regulatory frameworks, the insurance industry is poised for substantial growth. These programs aim to encourage healthier lifestyles, which in turn can lead to fewer medical claims and cost savings for insurance providers. 

Also Read: 5 key reasons health insurance is crucial for young adults' future security

Furthermore, wellness programs have been shown to correlate with increased customer satisfaction and higher policy renewal rates. As governments around the world seek to find ways to manage the costs of healthcare, these programs offer a potential solution by focusing on preventive care and maintaining good health. Gone are the days of lengthy medical examinations and cumbersome paperwork. 

With facial health checks now being in the insurance industry, individuals can now undergo a quick and non-invasive assessment of their health status using cutting-edge facial recognition technology. This process involves capturing images of the applicant's face, which are then analysed to detect potential health risks and determine insurance eligibility. This transformative approach is revolutionising the way policies are underwritten, offering both convenience and accuracy for policyholders in all the aspects.

Long-term care and wellness integration on various aspects of health coverage

Wellness initiatives provide ongoing support to policyholders by promoting longevity through the encouragement of healthier habits, fostering community connections, and providing incentives for continued participation. Research indicates that insurance products incorporating wellness benefits have a higher tendency to attract and retain healthier individuals compared to those lacking such benefits. 

According to a 2019 report from the World Health Organization (WHO), the likelihood of premature death from non-communicable diseases (NCDs) between the ages of 30 and 70 is 22%. By making minor lifestyle adjustments and providing a modest push, these initiatives effectively contribute to the maintenance of long-term health and insurance coverage.

Also Read: What piece do healthcare fintechs make in the health insurance jigsaw puzzle?

Effectiveness and Measurement

To assess the performance of wellness programs in terms of improving overall well-being, both quantitative and qualitative data must be considered. According to a Global Atlantic poll, the majority of respondents said they would maintain their current weight and go to the doctor for annual check-ups if provided a life insurance premium is adjusted to this. This data implies that wellness programs can attract healthier people, keep policyholders, and promote active engagement in preventative care.

Developing ecosystems for expanded offerings

The growth of digital technology has led to an array of wearables, apps, software, and tools that can be used for health monitoring. These technologies allow for the collection of data that can inform consent based personalised wellness initiatives, creating a more engaging and effective experience for customers. 

Moreover, with the appropriate long-term strategy, collaborations, and tech-driven ecosystems, there's immense potential to diversify product offerings. FinTech firms, for instance, are teaming up with wellness providers to deliver health solutions via mobile apps, including free health trackers. 

Also Read: DCGI mandates adherence to BIS standards for medical devices, strengthening of testing protocols

Given the projected increase in mobile internet users to 1.34 billion by 2030, the synergy between wearable health trackers and mobile apps is reshaping the landscape. By collaborating with tech companies, insurers can create innovative products that seamlessly integrate wellness programs.

The integration of wellness initiatives into life insurance offerings presents a promising opportunity for insurers and policyholders alike. By promoting healthier lifestyles these programs lead to cost optimisation, while providing policyholders with a better quality of life. As the insurance industry continues to evolve, it is essential to encourage ongoing innovation and integration of wellness initiatives.

Sachin Dutta, Chief Operating Officer, Canara HSBC Life Insurance

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Published: 07 Jun 2024, 01:29 PM IST
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