At San Diego's Health IQ, selling life insurance to healthy people comes with the added perk -- or punishment, depending on your outlook -- of practicing what you preach.
The firm, which has applied data science to craft life insurance plans that reward fitness freaks and diet do-gooders, also encourages its 140 employees to stay active and avoid sugar; there's a gym smack dab in the middle of the office and a no-candy policy, for instance.
It's this philosophy of incentivizing better choices that co-founder and CEO Munjal Shah, 44, applies inside and out of the company in the hopes that Health IQ can actually affect changes in lifestyle.
His startup, founded in 2013, seeks to make the world a healthier place one life insurance policy at time. Runners, weight-lifters and even vegans are offered life insurance plans at discounted rates, anywhere between 4 percent and 33 percent off standard monthly fees. Rates are based on scoring well on a randomized 30-question health quiz (out of 3,000 possible questions) and submitting additional data, such as weekly running mileage as verified by an approved smartphone app.
Thus far, Health IQ has convinced three carriers -- SBLI, Ameritas and Assurity -- to let it sell custom policies, underwritten by science and big data. The company got more than 1 million people to take its online health test and, after three years, looked at which of the respondents were still living or not. Health IQ gathered enough data to determine that those who were deemed health conscious died 41 percent less over this 3-year period than those who were not.
Enter the Health IQ life insurance business, where the basic idea is that people who take responsibility for their health should be recognized for their hard work. Or, in insurance terms, the health conscious die less and should get lower premiums.
It's the inverse approach most often taken by the insurance industry, where people are penalized for their poor choices, not necessarily celebrated for good ones. The Health IQ way started with a simple thought, inspired by Shah's own battle with the bulge and the recognition that you can't force people to get off the couch.
"What if we try to improve health by celebrating the people doing it right instead of harassing people who are doing it wrong?," Shah said.
Validating the idea is the Bay Area powerhouse Andreessen Horowitz, which just led a $35 million financing round, announced recently, in Health IQ. The venture capital firm, famous for making investments in Facebook, Slack and Airbnb, is backing Health IQ's life insurance play alongside other recognizable names, including Charles River Ventures, First Round Capital and Foundation Capital.
To date, Health IQ has raised $81 million in capital.