How do wellness incentives offered by insurers work? Are they beneficial in the long run?

Many insurers now offer wellness incentives, such as discounts on premiums for maintaining a healthy lifestyle. How do these programs work, and are they beneficial in the long run?
 
Reply by: Anuradha Sriram, Chief Actuary Officer, Aditya Birla Health Insurance

Wellness incentives in health insurance have caught people's eye as a way to push policyholders toward healthier living. These programs typically reward individuals for engaging in health-promoting activities, which can include regular exercise, routine check-ups, and participation in health screenings.
 
Here’s how the wellness programs work:

Reward Points System: Many insurers implement a points-based system where policyholders earn points for healthy behaviours. Activities such as walking, exercising, or attending health screenings can gain points which can be traded for cheaper premiums or other health-related perk. Aditya Birla Health Insurance offers Active Dayz™ to keep track of your steps every day.

Preventive Care Services: Wellness programs often cover preventive care, including annual check-ups, vaccinations, and screenings. This proactive approach helps identify potential health issues early, reducing the possibility of severe health problems down the line.

Personalized Health Coaching: Insurers also provide access to wellness coaches who guide policyholders in making healthier lifestyle choices. This can include diet advice, exercise plans, and strategies for managing stress.

Discounts on Premiums: By maintaining a healthy lifestyle and accumulating wellness points, policyholders can benefit from discounts on their insurance premiums during renewals. This can incentivize individuals to lead a healthy lifestyle and ease the stress of costly health insurance premiums.

These programs have significant long-term benefits for the policyholders. For individuals, they encourage regular health monitoring and preventive care, which can help catch potential health issues early before they become serious. Such proactive engagement and incentives enables customers to often experience improved quality of life, reduced medical expenses, and even higher productivity.

(Views expressed by the tax/investment expert are his/her own)