Pru better get down the gym!
By Danny Cox | 03 Jul, 2008
Prudential, under the banner of PruProtect, have brought some innovation into the UK. Life assurance where the premiums fall if you live a healthy lifestyle, but increase if you do not. The product is called Vitality and the idea has been imported from South Africa.
It is an interesting concept. Policyholder’s are rewarded for having a healthy lifestyle by reductions in premium, and other benefits such as low cost gym membership, health screenings etc, and therefore this provides additional motivation.
I like the idea that a life assurance policy can provide additional “membership” benefits. Let’s face it, we all dislike paying insurance premiums of any description so being able to get a feeling of better value is important. Fundamentally the policy itself has a comprehensive menu of options covering life, health and serious illness all in one package and the premiums are competitive.
When I first saw this, my fear was that it was a gimmick simply giving Prudential a different angle to sell life and health insurance. Life insurance companies have continually designed health and serious illness policies on a “my dad is bigger than your dad basis”, each policy covering an increasing range of illnesses and conditions, many of which haven’t been experienced in Europe since the dark ages. Here they are not marketing the policy to the policyholder, but to the broker, attempting to convince them that their policy is best and the one that the broker should recommend to their client.
Pru will also benefit in that healthier lifestyles equals fewer claims; yes they reduce the premiums, but the people most likely to benefit from the reductions are those who are already in the healthy lifestyle zone.
The problem with Vitality is that you have to submit returns to the insurer spelling out what a good boy or girl you have been this year. And this isn’t something to sketch out and shove up the chimney as you would do for Santa. A return means keeping records of what you have done. Activities have different amounts of Vitality points and we all know that points mean prizes, so requires effort, a huge amount of effort, not simplicity.
I like the idea that this can encourage people to take out more life/ health insurance – and particularly it is good for those who already use a gym at full cost so might be able to get their policy and gym membership for the same price.
However I hate the idea of adding a “Vitality” return to the pile of papers that accumulates on my desk at home. Trying to be healthy is hard enough work already.
