...AND CHEAPER...:

Last week, life insurance company John Hancock Financial announced that it would only sell so-called interactive policies that allow customers to share fitness data in exchange for discounts. Though customers can opt out of the program, the 156-year-old company's decision has created worry about privacy precedents and unintended consequences.

Broadly speaking, "interactive policy" means the company receives extra data and then uses it to adjust premiums or give discounts, according to a spokesperson from the National Association of Insurance Commissioners. These policies are frequently used in the United Kingdom and are becoming more popular in health insurance and with individual companies, but one of the most well-known examples comes from car insurance. Companies like Allstate frequently strike a deal with interested drivers: install a monitoring device in your car and, if you're a safe driver, receive a discount in return.

For insurers, this seems like a win-win since both customers and life insurance companies want the customers to live longer. "The life insurance industry is the most logical setting for wellness," says Brooks Tingle, president and CEO of John Hancock Insurance. "We have relationships with customers that average 20 years and we make no bones about the fact that we stand to benefit if our customers live longer." This feature will likely bring healthier people to the company, too, because people who are already active are more likely to be attracted to the option of discounts if they meet predetermined goals. (John Hancock only offers discounts; they don't change the original premiums.)

At John Hancock, customers can earn discounts in many ways, including taking online nutrition classes, going to the doctor, and, of course, wearing a tracker and meeting predetermined fitness goals. The fitness option is compatible with most major trackers, users can receive a free Fitbit, and the policy has been very popular since it debuted in 2015, says Tingle.

Tweet   @brothersjudd