Since smartphones have become such a ubiquitous part of modern life, companies in virtually every industry have looked for ways to leverage their use.
Naturally, life insurance companies will eventually follow suit.
Mortality data is the backbone of life insurance underwriting practices and product pricing. Every bit of qualified data life insurance companies collect moves them that much closer to accurately classifying risk and growing their businesses. And even though they’re not currently pursuing smartphone data, you can be sure it’s only a matter of time.
We’re already seeing a similar process in the auto insurance industry called usage-based pricing. Through technology known as telematics, auto insurance companies can monitor driver behavior such as speed, miles driven, hours driven and braking tendencies to better assess the risk a driver imposes. This assessment is used to help determine how much money a driver has to pay for insurance.
New Technology that Will Impact Life Insurance
With the recent release of Apple’s iOS 8 operating system comes a new app called Health. The app collects data from your other health and fitness apps and stores it in one centralized location aptly named the Dashboard.
One promising feature of iOS 8 is the new HealthKit tool available to app developers. HealthKit allows health and fitness apps to share their data with each other and with the Health app. As a result, you get all of your fitness and health related data centralized in one place. And you also have control over which apps have access to that data.
There are many apps available today that can monitor various aspects of our health, such as blood pressure, blood glucose, heart rate weight and activity levels. All of this data can now be stored in the new Health app.
In addition to apps, this data can either be linked through wireless wearables such as blood pressure wrist monitors or glocometers, or manually input into the app.
Life Insurance Companies Want This Data
Life insurance companies already collect medical information from you in the form of a paramedical exam. A typical exam includes:
- Body measurements (chest, waist)
- Blood pressure
- Heart rate
- Blood sample
- Urine sample
From your blood and urine samples, life insurance companies look at cholesterol levels, blood sugar levels, triglycerides, protein levels and more.
Life insurance companies also gather information about your medical history, family history, prescription medicine history and current health from your medical records. A company will usually order your medical records if something on your application triggers the need, such as current medications or other treatment.
But the real potential prize is the wealth of data you’re collecting on your smartphone. Should you choose to share any of this information with your doctor, it could become a part of your medical records. And if it does, a life insurance company will be able see it.
But this isn’t necessarily a bad thing. While it could work to your detriment, it may also help your cause. Remember all of the information the company collects from your paramed exam? Well, that information is really just a snapshot of your health on the day of your paramed exam.
But what if your health was a little ‘off’ that day? As in, maybe your heart rate was elevated due to a bad day at work or an argument with your spouse. Or perhaps your blood sugar was high because you slipped in a pumpkin spiced latte when you were supposed to be fasting for the exam (yes, we’ve seen it happen).
Now consider how these test results could be viewed by the life insurance company in light of more extensive, long-term measurements. For example, if your health app has been periodically transmitting your heart rate measurements to your doctor, the company may view your elevated test result as an anomaly when compared to your other recent measurements.
Having this data will allow the company to put together a better picture of your overall health. And in this example, you could actually get a better rating class and save some money on your policy.
Apps that Can Help Keep You Healthy
Sending health data to your doctor isn’t the only way to potentially save money, however. We’ve already talked about the plethora of apps available to monitor your health. But there is also a bunch of apps to get you moving, record your diet, measure calories in and out, track your sleep cycle and more.
The goal of these apps is to help you become and/or stay healthy. And good health is the absolute best way to keep your life insurance cost down.
Regardless of whether this information ever leaves your phone, if you’re using these apps regularly you should see positive results and better health. And that alone may be enough to save you some money on your term life insurance.
The Future is Not Here — Yet
Technology is moving in this direction, but it’s not quite here yet. Life insurance companies do not have access to smartphone data right now, and they may never. There are still privacy issues that need to be resolved as well as safeguards to be put in place to protect us all. But as the long-term viability of these tools becomes more clear and the legal issues sifted through, there’s no doubt we’ll see the life insurance industry become a part of the conversation.
And – I’ll say it again, only a little differently – this could be a good thing. Because current and accurate data will allow companies to make better informed business decisions, which, in turn, could mean better rates for you on your life insurance policy.