If you’re still sticking to your new year’s resolution – congratulations! If you’ve slipped, don’t lose faith – the key to long-lasting change is to make small specific gradual adjustments. Whether it’s improved fitness (Britain’s most popular NY resolution), weight loss, or drinking less alcohol, there are many good reasons to persevere.
Incentives include a lower risk of dozens of illnesses, and a good ten extra years in which to enjoy your retirement. But is cheaper health insurance amongst them? The answer is a little more complex than you might be hoping for, but it’s certainly worth looking into.
Surely a healthier lifestyle equates to lower health insurance premiums?
There are always exceptions, but for most people, practising a healthy lifestyle – ie you’re active, eat plenty of veg, go easy on the booze, and avoid tobacco – significantly reduces the risk of miserable, costly diseases like stroke, heart disease, type 2 diabetes, cancer and depression (see footnote below) compared to drinkers, smokers and the chronically inactive. If you’re not often ill, your health insurance company won’t need to pay out so often for your healthcare than for someone with chronic disease.
But although science and economics tell us that a healthier customer will cost less to insure, the crucial question is will your insurer pass the cost savings on to you?
1. It depends how long you’ve been healthy
It would be nice if we could revolutionise our lifestyles, then call the underwriters to say “right, I quit smoking – now charge me less!”. Unfortunately with most providers it doesn’t work like that; your health insurance renewal premiums are recalculated based on how much you’ve claimed in previous years (and your age).
“No claims” – that holy grail of insurance – suggests to insurers that you’re lower risk. If you haven’t claimed so far (or recently) on your personal or company policy, they won’t put your premiums up as much as if you’d spent every penny of your allowance on tests and treatment for the past five years.
So a recent change in lifestyle is unlikely to affect your premiums immediately. It will over time, though – think of it as a long term investment, as your continued good health leads to fewer claims as the years go by.
There is cause for hope, however, that some lifestyle changes may eventually lead more directly to lower health insurance premiums; Vitality (Prudential)’s life insurance product includes a nicotine test to be taken a year after you’ve quit smoking. If you took out a policy as a smoker, but the test later confirms that you’ve quit, your life insurance premiums will drop to those of a non-smoker. Perhaps this practise will migrate to health insurance, too.
Other providers will currently let you cancel your old life policy and re-apply with non-smoker status, although we should point out that this might not be good practise – if you’ve developed a medical condition at the same time as quitting smoking, this may hike your premium and cancel out any savings you get from being a non-smoker.
2. It depends who you’re insured with
We’re not in the business of promoting one health insurance provider over any other unless doing so represents good value to the customer, but it’s impossible to write this article without mentioning the different products on offer. Insurance companies have a vested interest in encouraging a healthy lifestyle, but few of them actively reward it – the Vitality (Prudential) programme is the only really user-friendly one, although Aviva’s My Health Counts program is also a contender.
Aviva offers up to 15% off renewal premiums for sending regular updates about your health – their philosophy is that by reporting your habits and current wellbeing, you’ll become more self-aware, and make improvements.
Vitality, on the other hand, offers a whole raft of incentives to get customers healthy. By tracking miles walked or jogged, you can build up reward points and exchange them for all manner of treats, from cinema tickets drinks at Starbucks (which seem to cost about the same, these days) to significant discounts on flights.
The scheme also offers discounted gym membership, spa days, and other products designed to improve personal health. Significantly, by making efforts to improve your health using these services, customers can achieve bronze, silver, gold or platinum status, which directly affects the quantity – and quality – of rewards you receive.
Bronze and silver don’t fare so well, but reach gold or platinum status and you’ll be quids in. It’s not so great for people who’d rather choose their own gym or spa, instead of being railroaded into choosing a Vitality “partner”, but in terms of responding to customer lifestyle choices it is certainly the most advanced product on the market.
The short answer:
Is yes, switching to a healthy lifestyle will save you money on your healthy insurance – but in the long term. There’s a cumulative benefit over years, rather than an instant discount.
Percentage risk for illnesses depends on age, gender, and which changes you adopt, but see Chief Medical Officer’s report 2009 page 23 for details re inactivity, and this Kings Fund healthy behaviours trend report for overview statistics across drinking, smoking, inactivity and healthy eating. See also this research from World Bank Group, and this toolkit from Cancer Research.