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Hancock launches new life insurance product for diabetes

Boston-based John Hancock is teaming up with a locally based joint venture from Google Inc.’s parent and Sanofi to introduce a new type of life insurance policy for those who suffer from diabetes.

The product is built off of Hancock’s Vitality program, which offers premium discounts and other rewards to policyholders who eat nutritious foods, exercise or meditate. From a business perspective, the idea is that if policyholders take steps to be healthier, they’ll be more likely to live longer — good for them, obviously, and good for Hancock, since it’ll have to pay out on fewer life insurance policies.

While Vitality is mass-marketed, the new product, named John Hancock Aspire, is for patients with both type 1 and 2 diabetes. It operates under the same premise: If Aspire policyholders have a healthy blood sugar level, they’ll earn points they can use for premium discounts and other rewards. If they improve their blood sugar level but it’s still elevated, they’ll also earn points, though not as much. They even get some points just for submitting the information.

Policyholders with type 2 diabetes will have access to Onduo, a Newton-based firm that offers a virtual clinic for diabetes patients, including online coaching and clinical support. Onduo is a joint venture between Verily, the life sciences unit of Alphabet Inc. (Nasdaq: GOOGL), and Sanofi (Nasdaq: SNY). Onduo enabled users to track blood sugar via an app.

“We’re not shy about the fact we think this is a great opportunity,” said Brooks Tingle, president and CEO of Hancock’s insurance unit. “Frankly, we think we can grow our business by this. It’s a large, unfortunately growing part of the population that we think has been underserved by the industry.”

In announcing the new product Monday, Hancock cited research finding that of the approximately 30 million Americans with diabetes, half do not have life insurance or do not have enough life insurance. A substantial chunk of those with diabetes report a belief that they won’t qualify for life insurance or that the policy will be too expensive for them.

Last year, Hancock approved 88 percent of the life insurance applications it received from those with type 2 diabetes, according to the company.

Hancock, like other life insurers, is looking for a sales boost, in part because millennials are pushing off marriage and children, two life events that lead people to consider life insurance. In 2018, the company’s life insurance sales fell by 8 percent year-over-year, to $426 million. From 2012 to 2018, sales dropped by more than 20 percent.

“There are lots of people looking at diabetes, and lots of people looking to make a difference. If you look at it, the life insurance industry has not been part of that, but if you think about it, shouldn’t it have among the greatest interest in it?” Tingle said.

While those with diabetes represent a riskier pool of policyholders than the general population, that risk will be priced into the policies, according to Tingle. And if the policyholders are controlling their condition, they’ll receive a financial benefit, he said.

Tingle said that in the future, he could envision Hancock pursuing a similar model with other chronic medical conditions.

Written by: Greg Ryan  – Law and Money Reporter, Boston Business Journal

Published on: Oct 28, 2019, 5:34pm EDT

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