Smoker Annuity Rates

Smoker annuity rates apply to people who smoke 10 or more cigarettes per day (or 3 ounces of cigarette tobacco per week) and have done so for the past 10 years. These rates can be up to 20% higher than standard annuity rates. Many smokers of retirement age also suffer from ill health, which makes them eligible for even higher annuity rates.

Smoker annuity rates up to 20% higher

Higher annuity rates if you also suffer from ill health

As a smoker you can be eligible for higher annuity rates in two ways:

1. If you smoke, but otherwise you’re fit and healthy. How much you smoke can effect the annuity rates.

2. If you smoke, and also have ill health. How much you smoke and the severity of the ill health can effect the annuity rates.

The majority of smokers at retirement do suffer from ill health. This means they are eligible for even higher annuity rates, known as enhanced annuity rates. These can be a lot higher than what might be termed ’smoker only’ rates. See the example quotes further down the page.

Around 40% of people at retirement are eligible for these higher annuity rates, but only a few make the effort to apply; the rest miss out.

Significantly higher annuity rates for severe ill health

In addition to your smoking habits, the more severe any medical condition or conditions you suffer from, the higher your annuity payments will be, and that could be 25%, 35%, or 45% higher, or maybe even more; there’s no real upper limit. The higher annuity rates will be due in part to your smoking habits, and in part to your ill health. Both smoking and ill health can effect your life expectancy, and the shorter your life expectancy, the higher the annuity rates.

Each case can be very different

Your circumstances can effect the annuity rates you’re offered. We can’t, for example, say that a regular smoker will automatically get a 20% increase in annuity rates, nor can we say that someone who smokes and has high blood pressure will get a 25% increase, because there are other factors to consider, and each case is treated on its own merits. 

Fully diclose your smoking habits and any medical conditions

To get the best annuity rates, in addition to your personal details it’s important that you disclose everything about your smoking habits, any lifestyle issues, and any medical condition(s) (if you suffer from ill health). 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 smoke, and if you smoke and suffer from ill health.

‘Smoker only’ quotes in the first three tables, taken from the FSA’s annuity tables, 1st March, 2010. 

Male life. Monthly incomes from a £50,000 fund. Level income, no guarantee period.

Female life. Monthly incomes from a £50,000 fund. Level income, no guarantee period.

Joint life, with 50% spouse’s pension. Monthly incomes from a £50,000 fund. Level income, no guarantee period.

and, for smokers who also suffer from ill health:

Monthly incomes from a £50,000 fund. Level income, no guarantee period. 

Example 1. Smokes 25 cigarettes per day and also has long standing well managed diabetes. Taking tablets to control blood pressure, cholesterol, and diabetes. Recent stroke, but fully recovered and enjoying an active lifestyle.

Example 2. Smokes 25 cigarettes per day and recently diagnosed with lung cancer which has spread to the bones. Has had radiotherapy and is currently in the middle of a cycle of chemotherapy.

Example 3. Smokes 25 cigarettes per day. In good health generally but takes two medications controlling blood pressure and a statin to keep cholesterol low.

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 well known insurance companies there are also some smaller specialist annuity providers offering enhanced annuity rates and smoker annuity rates.

Why the higher annuity rates

It’s all down to life expectancy. If you smoke or suffer from ill health, it’s likely to reduce your life expectancy. If you smoke excessively or 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 for the smoker with ill health examples

These 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.

Ill health

Typical smoker related medical conditions include emphysema, chronic bronchitis, COPD (chronic obstructive pulmonary disease), heart and vascular diseases, and many cancers as well as lung cancer. For further details on medical conditions please see the enhanced annuity page.

Extra assistance with your enquiry

If you suffer from ill health, we can assist 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.