Impaired Life Annuities
An Impaired Life Annuity may be appropriate for annuitants who have a medical problem which may affect their longevity. As income from an annuity is affected by life expectancy, those with medical problems may receive an increased income by taking out an impaired life annuity. Research has shown that up to 40% of people could obtain enhanced rates when they set up their annuity, yet only a tiny proportion of these people actually apply for an enhanced annuity rate.
Qualifying for an impaired life annuity
If either you or your partner have or currently suffer from life threatening illnesses or could reasonably be expected to have a reduced life expectancy on medical grounds then an impaired life annuity may offer you an uplifted rate, of up to 75%, relative to a standard annuity. This is to reflect the increased likelihood of earlier death and a reduced risk, from the Life Office's point of view, of longevity. Impaired rates can often be significantly more generous than standard annuity rates.
If you suffered from a car accident and have impaired mobility, this is not life threatening and as such would be unlikely to give you an enhanced annuity rate. Had you suffered a couple of heart attacks, but these were over 10 years ago and there have been no recurring symptoms the medical underwriting departments of the Life Offices offering impaired rates would not consider you for an enhanced rate.
In addition to people who suffer serious medical conditions such as a heart attack or cancer, less serious diseases such as obesity or diabetes may also qualify for impaired life annuity rates. Some diseases such as chronic obstructive pulmonary disease and certain cancers, have decreased in prevalence. Others, such as obesity and diabetes, have grown rapidly and can be taken into account by underwriters when determining your annuity rate. Click here for a list of qualifying medical conditions.
Applying for an impaired life annuity involves a process of medical underwriting. This is where the Life Office will carry out an assessment of your life expectancy based on the medical details you have disclosed. They may request to see your medical records or, particularly with larger cases, they may ask you to attend a medical examination.
How to apply for an Impaired Life Annuity
It is best to make a multiple application, since an impaired life annuity requires medical underwriting and rates vary considerably across the providers. All you need to do is complete our impaired life annuity questionnaire form which we will then forward to several Life Offices for an annuity comparison. The results take about 2-3 working days to be sent back to you after a medical underwriting assessment. These figures then need to be compared with standard annuity rates available by quoting for an open market option which our annuity quotation system can help you with. A multiple application usually takes 48 hours to compile and return to you.
Life Style Annuities
Life Style Annuities are increasing in popularity. By opting for such an annuity the individual can expect an income that will take into account certain factors surrounding their lifestyle and background which could affect their life expectancy. For example, an office worker may be expected to live longer than a coal miner all their life. A non-smoker would be expected to live longer than a smoker. Income levels will therefore be altered accordingly.
Impaired Life Annuity Rates
All rates are subject to medical underwriting and will depend on the severity of the conditions involved, the date of diagnosis, the strength and dosages of medications taken and any recent changes in the severity of the condition. Underwriters can differ in terms of how they assess risk and some impaired annuity providers are more generous than others- depending on the diagnosed condition. For this reason we submit a multiple submission to the underwriters for an assessment at the quote stage. These offers are then forwarded to you to allow a decision to be made as to which offer to proceed with. Currently there are eight impaired life annuity providers in the market and offers are invited from each of them. The companies offering impaired life annuities include Aviva, Canada Life, Just Retirement, Legal and General, Liverpool Victoria, MGM Advantage, Partnership Assurance and the Prudential.