The gym and exercise sector is criticising a move, to remove a physical activity benefit on a health insurance policy

Southern Cross Health Insurance has stopped paying out 50-dollars a year to long-time customers who are signing up to sporting events.

The insurer says the benefit wasn't strongly linked to better medical outcomes, and only one-percent of customers took it up.

Exercise NZ CEO Richard Beddie says the usage doesn't reflect the purpose.

He says the initiative was implemented poorly, but completely scrapping it isn't the answer.