Annuity Types

There are many different types of annuities to choose from, and it is important that you purchase the right annuity, especially if you suffer from ill health or if you’re a smoker. Please contact us if you would like some assistance in selecting the right annuity for your particular circumstances.

Different types of annuities

Lifetime annuity

This is a generic term, covering the annuities described below. You can add different annuity options depending on your particular needs and circumstances.

Conventional annuity

This provides a guaranteed income for life, and is for those people who are of good health and non-smoking. Please see the standard annuity rates page for some example quotes.

Single-level annuity

This is the simplest type of annuity, and it pays out exactly the same amount to an individual (the “annuitant”) every month until the annuitant dies.

Annuities for those with ill health

Enhanced annuity, or impaired life annuity

These annuities are designed to pay you more income if you’re suffering from ill health, if you are a smoker, or if you’ve ever been hospitalised. Many hundreds of medical conditions can be considered, with even mild conditions qualifying for these higher annuity rates. To check out quotes please see the smoker annuity rates and enhanced annuity rates pages.

Investment related annuities

With profits annuity

This type of annuity pays an income for life with the potential for growth above inflation over the long-term, and does contain a degree of risk as the level of income can vary.

Unit linked annuity

This is similar to a with profits annuity but with greater risk, as it invests in units in investment funds. Again, the level of income can vary.

Other annuities

Protected rights annuity

This is designed for those National Insurance rebates that have accrued in your pension fund.

Temporary or short-term annuity

These annuities allow individuals before age 75 to use part of a pension fund to buy a fixed-term annuity lasting up to five years. They can choose annuity options in much the same way as basic annuities.

Capital or value-protected annuities

These will pay a lump sum on the death of the annuitant, equivalent to the difference between the original purchase price and total annuity payments made. The lump sum is taxed at 35%. They are only available until age 75. 

And finally…

See the annuity guide page for assistance in identifying the right annuity type to match your requirements. Alternatives to annuities are described on the other products page.