Here’s a good example of someone receiving the best enhanced annuity rates by taking appropriate advice when arranging his annuity income. When Mr. E., as we’ll call him, was faced with selecting an annuity, he was determined to choose something which would provide a secure income for both himself and his beloved wife for the rest of their lives. The retired manager had in mind that when it came to taking his pension, he realised that as he already had a few PEPs and ISAs that he did not want to be any more reliant on the performance of the stockmarket, so basically he wanted a guaranteed income and that is what you get with an annuity.
Mr. E. used a specialist annuity service to track down the best annuity rate, and although he plays golf several days a week he was advised that he would qualify for an enhanced annuity because of his medical history. He also wanted to make sure his wife would be provided for through his annuity arrangement and decided on a joint-life annuity with Aviva. The others were only offering about 60% and some only 50% of the initial income for his wife if he died, so he ended up with Aviva because they offered 100% instead.
There are a few questions that every insurer should ask of someone looking to purchase an annuity. First, do people realise that they are locked into an annuity for life? Do they have any health issues (e.g. smoker, high blood pressure, overweight, heart trouble) which could mean they get enhanced annuity rates? Do they want to cover a partner? Do they want a 10-year guarantee period in case they die early? Do they want to protect against inflation? Might they want to leave money invested and just take their tax-free cash for now? And there’s probably more.