Yes, you can buy an Apple Watch for $25—but you'll have to work out a lot

Apple and life insurance provider John Hancock are teaming up to give customers massively discounted Apple Watches with a new incentive program, but there's a catch: To earn the savings, you'll have to sweat.

John Hancock policyholders who enroll in the company's Vitality program will now be eligible for $25 Apple Watch Series 3 devices, cutting the cost of the brand new smartwatch by nearly $300. If customers want the new LTE-connected version of the wearable, they'll have to pay an extra upgrade fee.

Once the watch is bought, then the games begin. The policyholders have to meet certain wellness targets through regular exercise and health screenings over two years in order to "earn" the discount, or they'll be required to pay off the rest of the wearable's price in installments. The program also offers health tracking with complimentary Fitbit devices.

John Hancock SVP Brooks Tingle told CNBC the new program comes after a successful trial run that began a few years ago. The trial saw a 20 percent increase in physical activity by participants. Roughly half of those trial customers met their activity goals and wound up with a free Apple Watch.

John Hancock isn't the first insurance company to take advantage of the Apple Watch for wellness programs. Aetna started offering its employees and some policyholders subsidized devices last year, and the insurer and Apple could potentially expand the partnership's reach to its entire 23 million strong membership base.

There is one glaring question raised by these wellness partnerships: What do the companies do with the data collected by the devices? A report published last year by the Center for Digital Democracy and American University claimed that there are almost no legal safeguards to prevent the wide-scale sale of consumer health data to an eager market, which could lead to major privacy issues.

The wearable incentive programs can be a major driver for healthier users, and in the future the health data could even be used to personalize insurance policies to better fit the individual. But that could also mean that some people could be forced to pay higher rates, and the distribution of customer data could be another major incursion into users' privacy.

The Aetna program shares "aggregate data" between Apple and the insurer, which Aetna claimed would be used to develop programs to better serve its members. John Hancock's Vitality program has "safeguards in place" to protect the health data collected by the trackers, according to CNBC, but there were no specific details reported. We reached out to John Hancock for more specific detail about its data protection practices, and will update this story upon receiving a response.

UPDATE: Oct. 25, 2017, 11:10 a.m. EDT John Hancock replied to our request for comment with a statement about the company's customer data policy:

John Hancock is committed to protecting our policyholders’ personal information. It will only be used in order to conduct business and as permitted or required by law. We will not sell information or share health data with third parties for their marketing purposes.

For more detail on safeguards, please see the “how we protect your personal information” section of our current privacy policy.