Impaired Life Annuities
Enhanced Annuities
If you or your partner are suffering from a serious medical condition, your retirement may not last as long as someone who is in good health. If so, it may be possible to obtain a higher than normal pre-tax retirement income from the accumulated pension funds.
There are various different types of enhanced annuities available, with the most common being as follows:
Impaired Life Annuities
Impaired life annuities are available to certain people where they qualify after meeting certain conditions / criteria. The most common enhancement available to an individual is where they are recognised as a smoker.
Other enhancements are available if an individual suffers from ill-health, certain medical conditions and even the type of job they do or where they live.
Smokers
If you are a smoker and tend to smoke 10 or more cigarettes each day, and have done so for the last 10 years or more, you may then possibly qualify for an impaired life annuity.
These rates can make quite a substantial difference to the level of retirement income. If you stop smoking after you have purchased your annuity your income will not be affected.
Impaired Life / Suffer from medical conditions
An individual may qualify for an imparied life annuity if they are in poor health or have had any previous illness or major surgery which is likely to reduce their life span.
One thing to be aware of is that an impaired life annuity can often take longer to set up than a normal annuity. This is due to the increased administration time created by the requirement to obtain medical information from an individual's doctor and the subsequent underwritting assessment.
Illnesses that are often considered include:
- diabetes
- kidney disease
- liver impairment
- hypertension (which cannot be contolled by medication)
- heart conditions
- many types of cancer (whether or not they are in remission)
Some illnesses can often result in a significant increase in your income, sometimes as much as 30%*.
If a spouse's or partner's pension is included, then his or her health should also be assessed, as it may improve the level of income offered.
Lifestyle (Socio Geographic-Economic)
Another type of annuity, often overlooked, is the lifestyle annuity (or socio-geo-economic annuity).
If an individual is employed in some form of manual occupation where physical labour accounts for a large percentage of their work and they live in certain areas of the UK, they may possibly qualify for this type of annuity, which usually offers a higher annuity rate than the standard annuity rates available.
These, although different in some respects to the imparied life annuity help the individual avoid the "cross mortality subsidy" trap. It seems fair to us that if you would have to pay more for life assurance, conversely you should receive more from your annuity.
For all the above annuities, each case is assessed on an individual case by case basis.
Questions
If you can answer yes to any of the following questions then we may be able to obtain a higher level of annuity income for you:
- Do you regularly smoke cigarettes?
- Do you suffer from diabetes?
- Do you suffer from chronic asthma?
- Do you suffer from or have you ever suffered from a serious illness
such as cancer, stroke, or heart attack? - Have you recently undergone major surgery?
- Have you worked in a manual occupation?
If you are considering any form of annuity purchase, and you think you may possibly benefit from one of the above enhancements, then please contact us for more details and to arrange a personal quotation.
