Enhanced Annuity Rates

Around 40% of people at retirement are eligible for higher, or enhanced, annuity rates. However, only a few actually apply; the rest lose out. These rates can be up to 30% higher than standard annuity rates, and that can make a huge difference to your annuity income. 

Enhanced annuity rates can be up to 30% higher

Three simple questions to check if you’re eligible

You might be eligible for enhanced annuity rates if you can answer ‘yes’ to one of the following questions:

■ Are you a regular smoker?

■ Do you now or have you ever taken prescription medication?

■ Have you ever been hospitalised for a medical condition?

Over 1,500 medical conditions can be considered

There are over 1,500 medical conditions that can be considered for higher annuity rates. If you have a medical condition, even if it’s not so serious, you might qualify for enhanced annuity rates. Any major surgery will also be taken into account. See the example quotes lower down the page.

Significantly higher annuity rates for more severe medical conditions

The more severe you’re medical condition or conditions, the higher your annuity payments will be, and that could be 20%, 30%, or 40% higher, or maybe even more; there’s no real upper limit. It’s important to disclose fully the details of any medical conditions you are suffering from, or have suffered from in the past, to get the best annuity rates. Ill health, as well as the other factors mentioned below, has an effect on your life expectancy. And, the shorter your life expectancy, the higher the annuity rates. 

Each case can be very different

Annuity rates depend on the details of your ill health. We can’t, for example, say that high blood pressure will get you annuity rates that are 20% higher, because there might be other issues to consider. Each case is treated on its own merits.

Higher annuity rates don’t just apply to ill health 

You might qualify for higher annuity rates because you worked in a manual, more risky occupation (e.g. a miner); or perhaps because you live in a less wealthy area (postcode annuities); or because of certain lifestyle issues, which includes smoking, height, weight, and your consumption of alcohol. Make sure you disclose everything about your circumstances. This can make a difference to the annuity rates you get. 

Full details of any medical condition(s) need to be disclosed 

To get the best annuity rates, in addition to your personal details it’s important that you disclose everything about your medical condition(s), along with details of any medication. If applicable, details are also required about your spouse or partner.

Please contact us if you would like some annuity quotes prepared to match with your personal requirements.

Example quotes

These illustrate the higher annuity rates available if you suffer from ill health.

These quotes are monthly and are based on a £50,000 pension fund, after taking tax-free cash, and are on a level basis, with no guarantee period. 

Example 1. Rheumatoid arthritis. Needing help with most activities of daily living.

Example 2. Kidney transplant 3 years ago. On medication for high blood pressure.

Example 3. Breast cancer. Spread to lymph glands. Had radiotherapy.

Example 4. Pancreatic cancer. Spreading, and currently on chemo and radiotherapy.

Example 5. Heart arrhythmia. On medication for high blood pressure and cholestrol.

Some additional information

Individual underwriting

We are seeing more issues being considered in the calculation of annuity rates these days, which is leading us towards having bespoke annuity rates. This could be to the benefit of many people.

Specialist annuity providers

In addition to some well known insurance companies there are also some smaller specialist annuity providers offering enhanced annuity rates.

Why the higher annuity rates

It’s all down to life expectancy. If you suffer from ill health, it’s likely to reduce your life expectancy. If the ill health is more serious it will reduce your life expectancy even more. And, the shorter your life expectancy, the higher the annuity payments, because the anticipation is that they will be paid for a shorter period of time.

Annuity rates used

These rates were obtained from MGM Advantage and AEGON Scottish Equitable, November, 2009, and illustrate the higher incomes that could be available.

Annuities that increase in payment (an escalating income)

To see how this can affect your annuity quotes please see the annuity payments page.

The difference higher annuity rates can make

Remember, any increase in income that you might be entitled to is payable each month and for life. If the increase is, say, £30 per month, it could be payable for 20 years or more, and that’s a total of £7,200 extra for 20 years. An extra £50 per month equates to an additional £12,000 over 20 years.

Extra assistance

To help you with your enquiry, we can offer you with a dedicated telephone underwriting service, immediate accurate (i.e. not just indicative) annuity quotes, and also a 45 day quote guarantee period for impaired life annuities and enhanced annuities. We also have a dedicated enquiry form, enhanced annuity enquiry.

Our telephone service

If you wish, you can do everything over the telephone. It’s quick, convenient, personal, and free. It also saves you having to put your details online.