More than half of all annuity buyers could give their retirement income a significant boost, simply because many medical conditions entitle you to a better rate.
But many people just buy a standard annuity offered by their pension provider. However you should be aware that by using an Independent Financial Adviser, they will be able to shop around the whole annuity market and will ensure you get the best annuity rate for your circumstances.
Impaired life and enhanced annuities are available because if you have a qualifying condition you will, statistically, live a shorter life. If the insurer does not have to pay an income for so long, it can afford to pay more per year.
The extra income you will get varies hugely according to your medical condition. You may even see a modest increase simply for “lifestyle” factors such as smoking.
High blood pressure could boost your annuity by 6.5%, while coronary artery disease could improve it by 17%, according to Aviva. A combination of conditions could increase your income further still.
Getting the best rate can take a bit of work. For minor ailments and ‘lifestyle’ conditions, you should qualify for what is called an enhanced annuity. But people with more serious health problems, or more than one condition, need an ‘impaired life’ annuity.
It is impossible to know which insurance company will definitely offer the best annuity rate and therefore the Independent Financial Adviser will need to obtain quotes from all providers.
All you need to do is complete a standard medical form, which is accepted by all insurers. Fill it in as accurately as possible; remember that in this instance, unlike with life or travel insurance, the more severe the conditions, the better the deal you get.
Whatever size of pension fund you have, you deserve the best from it. Ensure you use an Independent Financial Adviser to shop around and find you the best rate.