Wellness Optimiser is a rolling or dynamic underwriting option that rewards protection insurance customers who engage in positive lifestyle choices. It gives them upfront and ongoing discounts in return for meeting specific health targets.
The process starts with the customer having a two yearly health check-up. For this they pay £10, which is heavily discounted compared to the actual cost. The check-up is undertaken through a partnership with Lloyds Pharmacy and other Vitality partners.
The customer receives a Wellness Status and this shows them their BMI, cholesterol, blood pressure and blood glucose levels.
By engaging in Wellness Optimiser, the customer receives an upfront discount on standard office premiums which is based on their age (on whole of life policies, with discounts up to 60%) or the term of the policy (on term plans, with longer terms generating the highest 40% discount).
Every two years the customer pays another £10 and undergoes another check. Achieving all four wellness reading targets gives the customer Select Status; three gives them Healthy status and anything else (including not attending) gives them just Everyday status. This result, linked with their Vitality Status, gives them a further discount of 1% a year if they hit the top targets, although premiums will stay the same or rise (up to 4% a year) if they do not or cannot achieve all the targets.
The system is adjusted for those with a high BMI or diabetes, offering higher discounts for the best health risks (up to 45% on term and 65% on WOL). Diabetics are also encouraged to attend a health check annually. This recognises that badly controlled diabetes can have particular health or mortality impacts.
What They Say
CEO Herschel Mayers said: "At VitalityLife we are doing all we can to provide the cover people need, while also rewarding them for improving their health.
"Traditional underwriting is typically performed at the application stage and records a number of key factors that can often change or improve over the lifetime of the policy. However, until now there has not been a specific approach to monitoring these factors on an ongoing basis in the market. Through our revolutionary Wellness Optimiser product, we are expanding our offering and encouraging members to have a biennial health check where specified clinical measures will be taken and used to adjust their future premiums."
What We Say
"A good few years back the industry debated the merits of ‘preferred lives’ – selecting only the best lives to get ordinary rates, so allowing them to get even cheaper premiums, albeit at the expense of a growing group that would be rated. It was never officially adopted but, over the years has arrived, pretty much by stealth.
"Logically though it still relied on the ‘snapshot’ approach adopted in the life underwriting process – we look at you today and ignore what you do in future. Wellness Optimiser addresses that, building on Vitality’s now well-established approach of rewarding positive actions by customers. And it does so by introducing what is in effect dynamic underwriting – or rather a series of snapshots where the insurer looks at certain pre-agreed criteria and either rewards or penalises through the simple mechanism of changing the premium. So, it’s not full re-underwriting but there are underwriting elements, albeit with limited customer downsides if targets are not met.
"So, is this good or bad? On one level it has similar drawbacks to preferred underwriting for the ‘have nots’ – not everyone can join the club or will be prepared to take action themselves to maintain and improve their lifestyle. Moreover, some of the measures they may have little direct control over e.g. blood pressure.
"So, it’s bad news then? No – accept the rules of the game and the upside is significant: the initial premium discount can be as high as 60%. That’s a massive saving and, while the average customer benefit will be lower than that figure, the key is that it is the customer who decides. Moreover, looked at from a societal basis, it must be a good thing to actively encourage people to look after themselves better.
"So, like some other Vitality products you will either love or hate this idea and, while it will suit some clients, it won’t suit all of them.
"It is though quite revolutionary and, whilst we may lament that price is all-important to so many people, as long as it is, why not engage and reap the benefits accordingly. If you can."