Higher income for those with poor health

Standard annuity rates are calculated with reference to the average life expectancy for people living in the UK. This is fine for those in good health, but not so good for those who have below average life expectancy.

An enhanced or impaired life annuity pays a higher income because an allowance is made for any medical conditions which might reduce life expectancy

You will probably qualify for an enhanced annuity if you can answer yes to one of the following questions:

• Do you smoke?
• Are you taking prescription medication?
• Have you been to hosital recently for a medical condition?

Sample annuity rates

Lifestyle Annuities

Lifestyle annuities take into account certain behavioral and environmental factors, as well as medical factors to determine if you have a reduced life expectancy. Any factor that may reduce life expectancy may be considered. These include:

• Smoking - 10 cigarettes a day for the last 10 years (or the equivalent cigars or tobacco)
• Obesity, high cholesterol, hypertension
• High blood pressure and diabetes mellitus

Enhanced Annuities and Impaired Life Annuities

These pay out more than lifestyle annuities for those with medical condition that may significantly reduced life expectancy. The following medical conditions will be considered:

• Heart attacks, heart surgery or angina
• Life threatening cancers
• Chronic asthma
• Major organ diseases e.g. liver or kidney
• Other life threatening illnesses such as Parkinson's, multiple sclerosis and strokes

There is no real difference between enhanced and impaired except the way that quoatations are arranged. For enhanced the insurance company will only use the information provided on the medical details form whereas for an impaired life annuity the insurer will require a medical report from your doctor, but you do not need to have a medical examination.

Enhanced annuities

Qualifying conditions

• Smoking
• High Blood Pressure / Cholesterol
• Diabetes
• Chronic Asthma
• Heart attack / disease
• Stroke
• Any type of cancer
• Parkinson's Disease
• Major organ failure