The world is grappling with a health and well-being crisis, with chronic diseases responsible for 74% of all deaths worldwide, a figure that has surged from 61% (32 million) in the last decade. Yet, an impressive 80% of these diseases, including heart disease, stroke, and type 2 diabetes, are preventable through lifestyle changes. Simple shifts in every day habits can substantially lower the risk of serious health conditions, underscoring the critical need for both individual and collective action towards healthier lifestyles.
However, bridging the gap between awareness and practice in adopting a healthy lifestyle necessitates a more dynamic and incentivized approach. Public awareness campaigns are crucial, but they must be coupled with tangible incentives that motivate individuals to make and maintain healthy choices.
In this landscape, insurance companies, particularly life insurers, emerge as pivotal players. Life insurance companies are well-positioned to drive this change towards preventative health by providing incentives for healthy living. Beyond their traditional role, they have a vested interest in the health of their policyholders. By offering incentives, they can encourage a shift towards healthier behaviours, aligning their financial interests with the welfare of their clients. Healthier lifestyles among policyholders lead to fewer claims, benefiting both the individual’s wellbeing and the insurer’s bottom line.
Understanding the insurance-wellbeing nexus
The insurance-wellbeing nexus is multifaceted, with life insurance being fundamentally connected to individual health and wellbeing. Healthier clients who live longer, pay more premiums, and make fewer claims. This interplay goes beyond mere financial transactions; it also fosters a societal culture shift where health and wellbeing is valued and prioritized.
In the United States, a mere 3% of the colossal $4 trillion healthcare expenditure is allocated towards prevention. Yet, preventable lifestyle behaviors are behind the majority of the disease burden and deaths globally. Life insurance companies have much to gain from their policyholders extended, healthier lives. With a healthier client base, they can minimize payouts and enhance their financial outcomes.
For example, if a life insurance policyholder with a $1 million policy were to die, the company would have to pay out this significant sum. Therefore, life insurers would likely prefer to invest a portion of this sum in maintaining the health of this policyholders to prevent high-risk illnesses.