An enhanced annuity could provide substantially more income for you in retirement. Insurance companies, like Aviva, Canada life, Just retirement, Partnership, MGM Advantage and Prudential will increase or enhance your annuity and so your retirement income for those who :-
- Are overweight
- Have one or more of a list of medical conditions
- Take one or more of a list of medications
If you have any medical conditions, and you have ever applied for life assurance only to be told that ‘the standard rates don’t apply to you’, buying an annuity is your chance to even the score. You may be able to get more annuity income for the rest of your life as a result of your medical history or your current medical conditions.
Why would the insurance companies give you an enhanced annuity?
When you exchange your pension pot for a lifetime income the insurance company calculates your life expectancy. In short, if your health is poor, they calculate that they can afford to pay you a lttle more because they don’t think they will need to pay it for very long.
Is it worth you checking out if you qualify for an enhancement?
The answer has to be ‘yes’. In our experience, an enhancement is offered in around 2/3 of cases, so there is no point not trying. In fact, enhancements have become so prevalent that certain companies like Just Retirement, Partnership and MGM Advantage specialise in enhanced annuities and so don’t bother offer an ‘un-enhanced’ rate.
What does an enhancement mean for your retirement income?
This example shows how particular factors can effect the amount of income you will receive.
|Medical or lifestyle conditions||Annuity quote||Extra income each year|
|Healthy individual||£5,653||Extra Income||% Increase|
|High blood pressure||£5,707||£54||1|
|Organ transplant (i.e. kidney)||£7,215||£1,562||28|
|Diabetes with complications||£8,011||£2,358||42|
|Major medical condition (i.e. lung cancer)||£8,063||£2,410||43|
Tables of Quotes from ExWeb February 2013