You can benefit from wellness loyalty programmes if you understand how they work.

This article was first published in the first-quarter 2013 edition of Personal Finance magazine.

“I’ve just joined Discovery, and I want to know if it’s worthwhile joining Vitality,” asks Bongi, on an online forum, about the wellness and loyalty programme offered to members of Discovery Health Medical Scheme and Discovery Life policyholders.

Bongi’s question is one that many medical scheme members and users of financial products may be asking as scheme administrators and other financial services companies develop programmes aimed at incentivising you to lead a healthy lifestyle and use the financial products in their stable.

Some 1.3 million beneficiaries of medical schemes administered by Discovery Health have decided that loyalty does pay, making Vitality the biggest loyalty and wellness programme in South Africa.

Vitality also provides individual and corporate wellness initiatives in the United Kingdom, the United States and China. The programme’s global membership exceeds three million.

Meanwhile, about 110 000 members of schemes administered by Momentum Health have opted to join its loyalty programme, Multiply.

Other popular wellness loyalty programmes are Own Your Life (offered by Liberty), Reality (Sanlam) and Zurreal 4Life (Resolution).

This article looks at the two biggest programmes in South Africa, Vitality and Multiply, as examples of how such wellness-cum-loyalty programmes work and how you should weigh up the costs versus the benefits of joining.

What this article does not address – and it should be your starting point – is how to determine whether or not the relevant medical scheme or life assurance policy is suitable for you.

A properly qualified financial adviser should be able to help you to ascertain whether the core pro-duct is a good one, before you look at the add-on benefits. Whether membership comes with free movie tickets should be the last question you ask. Free movies won’t help you when your medical scheme’s cover for cancer is inadequate by many thousands of rands, or you find out that your dread disease policy doesn’t cover your illness.

In response to her question to the online forum, Bongi was told: “Why don’t you just go through their website and see if your lifestyle suits what Vitality provides? The free lifetime gym membership is worth it if you are a gym freak.”

And: “I thought it was worth it, but not any more. I guess it depends on the individual. I don’t go to the movies often. I don’t fly often. I rarely go to the gym. I have a magazine subscription that I can afford to pay cash for if I want it. I do my food shopping at Checkers, but if I am at Pick n Pay, I forget that I need to swipe their card. So I am going to cancel it, as I feel that I am losing rather than gaining.”

If you want to know that you will get your money’s worth from a wellness loyalty programme, it is definitely worthwhile checking that the rewards on offer are ones you will use. If you are a gym-goer, there may well be a substantial benefit in joining, but you don’t have to be a gym user to get fitter and earn points, and hence rewards, on these programmes. Both Vitality and Multiply offer alternative ways to prove you are physically active, and even the member who takes just a few walks each week can benefit.

Discovery admits that 50 percent of the points that Vitality members earn are earned in gyms and from other formal physical activities, such as marathons or cycle races, but Dr Craig Nossel, head of Vitality Wellness, says you can reach the highest Vitality status – Gold – without setting foot in a gym.

The rewards are based on the extent to which you engage in a programme, the aim of which is to motivate you to do things that will improve your health and well-being, but even if you participate at a lower level, you may feel suitably rewarded for what you have achieved.

While the biggest rewards are for members who are physically fit, even couch potatoes can earn points for demonstrating awareness of their health, or ill-health, by, for example, taking their children to the dentist, going for a pap smear or a prostate check, checking their cholesterol levels, or buying healthier foods.

If, in addition to belonging to the medical scheme, you use other Discovery or Momentum products, such as life policies, there may be financial incentives for you to join Vitality or Multiply, even if you are more of a layabout than a fitness fanatic.

You must be realistic when you assume you will use the gym or perform the activities that generate the savings on offer, or earn the points that will get you the rewards you expect. Add up the points you think you could earn for your current gym visits or other physical activities and the points you might earn for tests and assessments and compare the total with the points you need to accumulate to advance from one level to the next on the loyalty programme. The points may seem achievable, but be honest with yourself about the time you have available to do the things you are required to do.

Alternatively, if you believe the programme will incentivise you to be healthier, you could ignore the issue of whether or not you will get your money’s worth out of it.

Independent financial adviser Ian Beere of Netto Financial Services says paying up to R200 a month for a service that helps and incentivises you to make healthier choices is well worth it; ill-health could result in your incurring significant costs down the line.

Medical schemes and life assurers offer loyalty programmes that encourage you to lead a health-conscious lifestyle, because research has shown that they can benefit if you are healthy.

Discovery says its approach is a two-pronged one: first, to make it more affordable for you to lead a healthy lifestyle by, for example, becoming physically active or eating healthy food, and second, to encourage you to continue to do so with rewards linked to your status on the Vitality programme.

Discovery says a study it conducted on 300 000 adult members of Discovery Health Medical Scheme, of whom 190 000 had signed up for Vitality, showed that those who consistently maintained or increased fitness-related activities on the programme over a three-year period had the lowest probability of hospital admission and incurred the lowest hospital costs.

Members who remained inactive over three years – labelled the “consistently unengaged” – had the highest probability of being admitted to hospital and incurred the highest hospital costs, according to the 2012 Vitality Journal. The study found that activity levels increased the longer people remained on Vitality, which suggests that the programme has been successful in changing behaviour.

Discovery also found that its discounts for Vitality members who choose healthier food at Pick n Pay as part of the programme’s HealthyFood benefit had resulted in an increase in healthy food purchases.

Momentum Health echoed these findings, saying Multiply members claim 30 percent less than non-Multiply members when it comes to major medical expenses and chronic conditions. Jaco Oosthuizen, head of Multiply, says Multiply members do, however, claim more on day-to-day benefits from their medical savings accounts, which indicates a focus on preventative health care.

According to Oosthuizen, Momentum based its gym benefit on data that showed a correlation between members’ physical activity and their medical scheme claims. For example, he says, the data indicate that if someone goes to gym less than three times a month, his or her claims are in line with those of someone who does not go to gym at all. However, when gym visits increase, medical claims decrease dramatically – hence the bigger discount offered to Multiply members who use the gym more than three times a month.

Risk factors such as your body mass, blood pressure and cholesterol are also closely linked to claims, which is why wellness loyalty programmes encourage you to ascertain and improve your measures of these factors, Oosthuizen says.

Life assurance is a longer-term product, he says, so it is too soon to tell if Multiply has also had a positive impact on life assurance claims, but Momentum expects that it will. Multiply’s benefits certainly have led to members remaining longer with Momentum, Oosthuizen says, which is good for the life assurer.

If you do join a wellness loyalty programme, the one thing you don’t want to be is apathetic. If you lack the motivation to use the incentives to become healthier, or to get your money’s worth from the discounts and rewards, you are probably wasting your money. So it is important to be aware of the things you can and should do.

Vitality is an extensive programme that has evolved over 15 years. Discovery regularly extends the benefits, using its large membership to negotiate deals with Vitality partners.

Multiply started eight years ago as a benefit for members of Momentum Health Medical Scheme. Since Metropolitan and Momentum merged, the programme has been relaunched and made available to members of selected medical schemes (mostly those administered by Metropolitan Health) and to all Momentum clients (life assurance and investment products), even if they are not members of one of the medical schemes.

Although it is significantly smaller than Vitality, Multiply’s premiums are more affordable and its benefits are very competitive, according to Oosthuizen.

A big drawcard for Multiply members is that Momentum is the official sponsor of one-day international and domestic cricket events, enabling it to give its members free tickets to the domestic matches and a discount of 50 percent to the international ones.

Another feature that distinguishes Multiply from Vitality is Multiply’s focus on financial, as well as physical, well-being. This part of the programme is expected to be enhanced significantly this year.