Walking not only has health benefits, but may also reduce insurance premiums! Usage-based insurance has gathered significant attention around the world for the health promotion incentives it offers, and local insurance providers are starting to catch up to this new trend by making innovative offerings of their own. "Fubon Life SWF Term Health Insurance" (SWF) is the first usage-based insurance introduced in Taiwan that combines the use of a pace-counting APP. In addition to providing critical illness protection, SWF also offers discount on subsequent premiums if policyholders are able to maintain healthy level of paces. Policyholders may be granted up to 10% discount on premiums for a maximum of 19 years, which is equivalent to 190% the amount of annual premium. This incentive is intended to encourage policyholders to walk outdoors for their own health. The policy is expected to appeal to adults with regular walking or jogging habits and inspire voluntary health management among the general public after its launch on 4/21.
"Health Promotion & Prevention" - The New Insurance Agenda
Premium Discounts as the New Exercising Incentive
Tsai-Ling Chao, Executive Vice President of Fubon Life, said that health promotion has become a global trend. Rising health awareness, combined with recreational sports such as jogging and cycling, has resulted in the steadily increasing number of sporting population. In response to the rising health awareness, Fubon Life has been introducing insurance products that are associated with health management. After launching products with health-related features such as added coverage and cash back, Fubon Life once again moved ahead of peers and introduced "Health Checkup In-kind Benefit Policy" and "SWF" usage-based insurance last year (2016), offering policyholders the incentive to walk in exchange for premium discount, and maintain exercise habits for disease prevention.
"SWF" is a 20-year term critical illness insurance with a 20-year premium payment period that targets persons aged 20~55. It combines the use of wearable device for health management. Policyholders simply need to download Fubon Life's proprietary "Pace Counting APP" or wear a compatible wristband to begin recording paces (Note 2). Pace records are transmitted automatically on a daily basis, and may entitle the policyholder up to 19 years of discount on policy premiums. This product has three main features:
(1)The industry's first usage-based insurance that offers discount on policy premiums in connection with the use of "Pace Counting APP or smart wristband."
In order to allow greater flexibility for policyholders, Fubon Life became the first in the insurance industry to introduce a pace-counting APP named "Health Motivator." Policyholders are not required to purchase a separate wristband but may simply download the APP onto their cellphones to be able to count their paces, upload results, view results, and check premium discounts. The APP may also be linked to a Garmin wristband to constantly record and monitor exercises, and motivate customers to maintain healthy level of pacing not only for premium discounts, but for a healthier and happier future as well.
(2)Offers up to 10% discount on policy premium, the highest in the industry
Policyholders who record their paces using the "Health Motivator" APP or a compatible wristband and maintain daily average paces over a specified period of time shall be entitled to a discount on following year's premiums. The greater the number of paces maintained, the higher the level of discount offered. For example: if the policyholder averages 6,000 paces or above in any 120-day period in a given year, the policyholder will be entitled to a 3% discount on following year's premiums; if the policyholder averages 8,000 paces or above in any 150-day period in a given year, the policyholder will be entitled to a 5% discount on following year's premiums; if the policyholder averages 10,000 paces or above in any 180-day period in a given year, the policyholder will be entitled to a 10% discount on following year's premiums. Policyholders are also entitled to an additional 1% discount when choosing to pay premiums via auto account transfer, which brings maximum premium discount to 11%. In other words, policyholders who walk regularly and make payments via bank transfer may save an amount up to 210% of annual premium over the policy duration, which equals 2 full years of premium.
(3)Timely and defined benefits
The insurance covers 7 critical illnesses including disability due to stroke (high severity), paralysis (high severity), cancer (high severity), acute myocardial infarction (high severity), coronary artery bypass grafting, end stage renal disease, major organ transplant, and transplant of hematopoietic stem cells. It pays benefits promptly in one lump-sum using government-defined standards to help reduce burden of medical expense.
A Term Policy that Provides High Coverage at Small Premiums
Aside from offering premium discounts based on paces traveled, "SWF" also covers critical illness, death and total disability. Should any of the unfortunate events occur, the company will make a lump-sum payment of the stated benefits. Example: a 20-year old lady purchases SWF for a NT$1-million coverage and chooses to make premiums using bank transfer. Annual premium amounts to NT$1,980 (after 1% discount, applicable to initial and subsequent premiums), averaging NT$165 per month, which is equivalent to one cup of Starbucks coffee. She would be entitled to a 10% discount on second year's premium if she maintains a 180-day average of 10,000 paces or above from the policy effective date until 60 days before the first policy year, meaning that she only needs to pay NT$1,780 for the second year. If she maintains 10,000 paces per day, she would save one full year's worth of premiums over a 10-year period, which is an attractive incentive for voluntary health management!
10,000 paces per day for up to 10% premium discount!
"SWF" is suitable for the following four groups of people: 1. Those who exercise regularly - simply put on a wearable device to monitor own health and receive benefits such as increased coverage and reduced premiums; 2. The young and middle-age working population - insuring at a young age guarantees higher sum assured, and lump-sum benefit payment in the event of critical illness helps reduce financial burden for self and family members. 3. Those who are careful with money - the product offers more discount the more paces traveled (3%, 5%, and 10%), and therefore satisfies people's needs for "least premium, highest coverage, and health benefits" all at the same time. 4. Those who wish to complement existing coverage - the product offers 20-year coverage that can easily work with existing insurance plans to provide additional protection for a particular life cycle.
Fubon Life commented that exercising is not as difficult as one would imagine. Policyholders can easily complete 6,000 paces simply by traveling between train station and office, train station and home, walking within the office, and going out for lunch, and meet the minimum requirement for 3% premium discount. Those who try to save more can increase their walking distance by alighting one station early or taking pets for an extra round of walk to complete 8,000 paces for 5% premium discount. Once policyholders have developed good exercise habits, they can aim for 10,000 paces per day and receive 10% discount on premiums.