Enhanced annuity and impaired life annuity entitlement does vary a little. The medical conditions that might entitle you to an impaired life annuity include heart disease, stroke, angina, cancer (various), chronic bronchitis and long-standing diabetes. Some insurance companies (the annuity providers) recognise hypertension. The acid test is the degree by which your medical condition is likely to reduce your life expectancy. Most people seeking impaired life annuities have to get their doctor to complete a medical questionnaire. Some annuity providers have a standard form. Simpler lifestyle annuities can be arranged on the basis of a box-ticking medical type form which you complete. These annuities offer better annuity rates if you smoke more than 10 cigarettes a day or are seriously overweight, defined as being 30% overweight for your height, age and gender. Manual workers might also qualify for higher annuity rates. 

Impaired life annuities are best suited to those people with more than a year to live. Someone looking at less than a year to live would do better to seek a special dispensation from the Revenue allowing them unlimited access to their pension fund, tax-free. Here’s an example; Mrs G, 60, of Eastbourne, suffers from a malignant liver tumour and long-standing hypertension, and she had two personal pensions. An annuity specialist was able to combine these and find her enhanced annuity rates 20% higher than those available from her own pension conpanies, resulting in her being thousands of pounds better off in her retirement as a result of shopping around.

Impaired life annuity rates can make quite a difference to your annuity income. People in poor health, or with unhealthy lifestyles, such as smoking or being overweight, should seek out specialist advice, otherwise they will be quoted a standard annuity rate based on normal life expectancy for a person of their age and gender and not the enhanced annuity rates from impaired lives or lifestyle annuities. Impaired life annuities pay much higher annuity rates to people with certain medical conditions because of their likely shorter lifespan. Providers include Just Retirement, MGM Advantage, LV=, and Partnership, as well as some well known insurers.

Most of these companies sell their enhanced annuities through independent financial advisers (IFAs). Some experts rightly claim that it’s a shame more people don’t use the open market option, which allows them to shop around with their pension fund to find the best annuity rates available. Some retirees could end up with an improvement in rates of up to 30%, because of their lifestyle, occupation or their ill health. Here’s details of an extreme case transacted a few years ago; a 75-year-old man with lung cancer was quoted a standard annual annuity income of just over £21,000 by his existing pension provider. A specialist enhanced annuity provider was able to boost this by about 80 per cent to nearly £38,500.

How do you get an enhanced annuity? When annuity providers (insurers) provide quotations for their current pension annuity rates, one of their primary tasks is to calculate life expectancy. They will include various factors in this calculation including your health, lifestyle, smoking habits, previous occupation, and even your postcode will count in some cases. Your smoking habits and your medical condition(s), both past and present, can all affect to a degree your life expectancy. Some annuity providers take these factors into account when setting their annuity rates. In some cases, this can mean much higher retirement income levels than those payable from a conventional annuity.

It is important to note that any entitlement to a higher pension annuity rate will be based on a possible reduction in your anticipated life expectancy, and not related at all to your quality of life. That is, you may qualify for a higher pension annuity income without necessarily having any impairment to what might be called normal living. For all these enhanced annuities, each case is considered on its own merits. If you have any queries regarding an enhanced annuity please feel free to contact one of our specialist advisers on 0800 169 1256.

How do you get the best enhanced annuity rates? When annuity providers (insurance companies) provide quotations for their current annuity rates, one of their primary tasks is to calculate your life expectancy. They will include a number of factors in this calculation including your health, your lifestyle, your smoking habits, your previous occupation, and even your postcode in some cases. Your smoking habits and medical condition(s), both past and present, can all affect your life expectancy. Some annuity providers take these details into account when setting their rates. In some cases, this can mean much higher income levels than those payable from a standard conventional annuity.

It is important to note that any entitlement to a higher annuity rate will be based on a possible reduction in your life expectancy, and not related to your quality of life. That is, you may qualify for a higher annuity income without necessarily having any impairment to what might be termed normal living. For all these annuities, each case is considered individually. If you have any questions regarding enhanced annuity rates please feel free to contact one of our advisers on 0800 169 1256.

The best UK annuity rates paying not a lot plus the State pension is unfortunately what many people in retirement have to rely on. Actually, 1 in 5 of retirees rely on State pension, not having sufficient annuity income. The findings from Aviva’s recent research are backed-up by those from another leading life company, Prudential. Almost a fifth of people retiring in 2010 will have no employer or personal pension or savings to live off on top of their State pension. The basic State pension pays £95.25 per week, and for a married couple it is £152.30. That compares poorly with average spending by a retiree aged 65 to 75 of around £321 per week.

As so many people expect to retire on the basic state pension alone, particularly when only half know how much it actually pays, there is still a clear need for people to understand the financial consequences of not making adequate provision for their time in retirement, comments Martyn Bogira, of Prudential. The Pensions Policy Institute (PPI) agrees that an increasing number of retirees will find themselves without the financial means to have the standard of living that they want. Younger people who can still do something to increase their pension savings should consider the problems afflicting those people about to retire. UK annuity rates alone, be they high or low, aren’t really going to matter a jot if there just isn’t a pension fund in place.