Impaired Annuities

Information concerning how your health could affect your annuity

What is an impaired annuity?

Insurance companies providing annuities are prepared to pay out more annual income if you have an existing medical condition that is expected to reduce your lifespan. The less years that they have to pay out an annuity denotes a higher amount they can give you. The increases in expected income can be between 20 to 40% more than a standard annuity.

The primary factors considered during the assessment for an imparied annuity are as follows:

bullet-point-blue2 The severity of the illness

bullet-point-blue2 The date and treatment levels

bullet-point-blue2 The history surrounding the illness

Traditionally individuals with a life expectancy of 5 years or less qualify for an impaired annuity. There is another option called enhanced annuities for persons with non critical conditions. These packages apply to people who are smokers, suffer from obesity and or drink higher quantities of alcohol.

Primary causes of death in the UK

bullet-point-blue2  Heart Disease – 35%

bullet-point-blue2  Cancer – 24%

bullet-point-blue2  Stroke – 12%

bullet-point-blue2  Essential Organ Failure – 8%

bullet-point-blue2  Other – 21%

Insurance companies offering impaired and enhanced annuities use a series of mortality data tables along with underwriting guides in order to determine the amount of income to pay an annuitant (retiree).

Terminal Illnesses

If you have a terminal illness, there is potentially a better option than receiving your income from an annuity. There is a legislation in favour of taking your pension on the ground of serious ill health (in some cases all of the money in the pension fund can be paid tax free).

Want more information?

Retirement options should never be decided on a whim, they deserve careful consideration. We believe that all our customers should receive the same service and options that we ourselves want in our retirement. If you’re unsure about what is right for you, or you simply want further information to help you make the right decision please talk to us.