Launch of life insurance that rewards your health

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A life insurance initiative that doesn’t just cover disaster, but also rewards its users with benefits such as premium discounts and cheaper travel, has just been launched.

The launch of AIA Australia’s Vitality program last week came after a successful pilot program was initiated by 200 advisers across the country from last December.

The fully integrated product will be sold initially through financial advisers to people who purchase an eligible protection policy with AIA Australia.

Russell Cain, chief executive of life insurance comparison service xLife that was part of the pilot, told Wealth Professional the initiative is a brand new concept that has never existed in the Australian market until now.

Users, who pay an extra $10 per month, move up levels by “knowing” or “improving” their health in order to gain rewards, he said.

“The first main benefit is the initial premium discount that you get for any lump sum policies. Your premium can have discounts of up to 20% off.”

By consistently knowing their health – which could include for example flu jabs, blood pressure checks, and mammograms; or improving their health through methods such as exercise and eating healthily, users move up four status levels: bronze, silver, gold and platinum.

The users must provide evidence that they are involved in the program, and it is possible to move down levels and lose parts of previously won premium discounts.
As well as the discounts, those involved can also get cash back.

“The thing I love about this is that for lump sum insurance every fifth year you get cash back on top of [the discounts],” said Cain.

The amount you get back depends on your status level, but ranges from 2% for bronze, to 10% for platinum.

Income protection insurance includes fewer benefits as it traditionally has more challenging rates and flexibility, however you can still get up to a 15% discount on premium, Cain said.

As well as the policy-related bonuses, throughout the program users can gain other perks, such as heavily discounted domestic and international flight tickets through Qantas, discounted Hoyts tickets, and gym and supermarket discounts.

Cain said as well as being great for clients, the program is of particular interest to advisers.

Because of the build-up of benefits customers are more reluctant to cancel their policy and drop back to zero again.

“The opportunity that we see from an adviser’s perspective is that this is a concept of product innovation in society with very good retention rates,” he said. “It’s using product innovation to drive good behaviour in consumers. Hopefully it’s going to be a win-win.”

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