While the controversy continues over the extent to which wellness programs can impact health insurance rates and employee contribution factors without engendering discrimination claims and constitutional challenges, life insurers may soon be the next to jump on the wellness bandwagon. Wellness initiatives have recently been introduced in the individual life insurance marketplace. Wellness may have additional incentives in this context as they may both reduce costs and increase policy values.

Similar to wellness programs implemented by employers and group health insurers, life insurers are offering incentives to individual insureds for engaging in certain healthy activities and from refraining from unhealthy conduct. For example, John Hancock Life Insurance Company recently announced a program under which life insurance consumers can save 10% or more on their premiums and earn rewards with retail establishments for annual health screenings, gym workouts and other physical activity, weight loss, flu shots and participation in online health courses. Policyholders will receive personalized health goals and will be able to log in and track their activities online. John Hancock and other carriers also provide free Fitbit fitness tracking devices to monitor their physical activities. As wellness points earned through these programs mount, so do savings and rewards. http://blogs.wsj.com/totalreturn/2015/04/08/life-insurance-policies-add-rewards-for-healthy-living/

In the context of both permanent and term life insurance products, as insureds accumulate healthy living activity wellness points, the premium can be reduced or cash value in permanent insurance can be increased. Whether and, if so, how these enhanced cash value incentives will apply with universal life products is not clear.

While opportunities to maximize life insurance at a lower cost based on healthy living is an exciting concept, given the split of authority in the various court decisions and divergent approaches taken by the United States Departments of Labor and Health & Human Services with regard to the legal efficacy of wellness incentives to health insurance, life insurers may want to tread lightly before restructuring their fees in a similar fashion.