Insurer Health IQ takes cryptic approach to fitness assessments
Life insurance start-up Health IQ is aiming to offer healthier customers better rates, and is identifying likely candidates by changing the types of questions it asks potential policyholders. Rather than asking how frequently customers exercise or whether they smoke, the company phrases its questions differently, making it harder for them to bend the truth. Policyholders might be asked whether they can run a mile in a certain time, or if they can identify a recommended portion size when shown a picture of food. Health IQ has raised $81m in financing. 

But Munjal Shah's problem turned out to be an inflammation of the lining of his lungs. Nonetheless, that hospital visit changed the course of his life.

Shah was worried about a heart attack, given his family history — his father, who moved from India to the U.S. — had his first heart attack in his 40s.

He was 37 at the time, but hadn't quite kicked an indulgence in sugary treats, like Frosted Flakes, Pop Tarts and cinnamon rolls. "Honestly, what went through my head is that it seemed so unfair," Shah recalled. "I had the best day of my entrepreneurial life after 10 years of work, and then I was going to die."

The day after Munjal Shah sold his company to Google in 2010, he was running when he experienced sharp chest pains. He ended up in the emergency room.

While at Google, he started taking classes at Stanford to learn about health and medicine. He cleaned up his diet and lost 40 pounds. And he made new friends, all fellow entrepreneurial types, who had similar health scares and subsequently changed their lifestyles.

The group eventually decided to quit their day jobs and start a health company. They had no clear business model in mind but were all curious about finding ways to reward people who were committed to being healthy.

First, they had to find them. And that's a lot more challenging than you might think.

Many of us fib to our doctors, saying that we eat better, drink less alcohol and exercise more than we actually do.

To get around these common lies, the team launched a health quiz, called Health IQ. It features questions that assess how health-conscious a person is, rather than how healthy they claim to be. For instance, instead of asking how much you run, they might ask if you can run an eight-minute mile. Rather than asking if you eat too much, the test will figure out if you understand portion control by checking if you can estimate how many cups of rice there are in a photo.

The test did a pretty good job of picking out those who were committed to their health. And it went viral. In less than four years, more than 1 million people took it.

During that time, about 2,000 of those people died.

And that's when Shah figured out how to make money: life insurance.

After factoring in things like gender, age and education status, Shah and his team learned that the health-conscious elite — the yoga practitioners, the crossfitters, the vegans or vegetarians, the strength trainers, the cyclists, the controlled diabetics, the triathletes and the marathoners — were far less likely to be among the people who died in this test group. Forty-one percent less likely, in fact.

In particular, it became clear that these people were less likely to die from cancer, which Shah calls the "blind spot" in most life insurance underwriting. Studies have shown that those who eat little meat, for instance, have a lower risk of colorectal cancer than people who eat meat most days of the week.

Shah still doesn't know from his data why the mortality rates are lower for yogi-loving vegans, at least not yet. It might be that they exercise more, eat better, are diligent about removing toxic chemicals from the home, or maybe it's a combination of factors. But for his purposes, it doesn't really matter. Now that he knows how to find them, he can sell them cheaper life insurance. And he estimates there are a lot of them — about 50 million in the United States.