Impaired life annuity and enhanced annuity sales continue to rise. UK sales of these types of annuities, which offer higher annuity incomes to people who suffer from ill health and to smokers, those likely to die prematurely, rose around 25% last year in a sign of their increasing popularity among retirees, according to a recent study. Sales of these products, known as impaired life annuities and enhanced annuities, rose to around £1.79 billion ($2.72 billion) last year, according to leading consultants Towers Watson.
These enhanced annuity products now account for about 17% of the UK pension annuity market, Towers Watson said, up from about 7.8% in 2001. 2009 was another record year for these enhanced annuity sales and means more consumers are benefiting from higher annuity incomes, said Towers Watson consultant Andy Sanders. Enhanced annuities were introduced into the UK in 1995, and are offered by companies including Aviva (was Norwich Union), Axa , Canada Life, Legal & General and also Prudential. Annuities offer retired individuals a fixed income for the rest of their lives in return for a lump sum paid on their retirement.