When it comes to financial services, having a good state of health is often desired and people tend to play their medical issues and lifestyle habits down when it comes to filling in a health questionnaire, as they believe coming across as someone who is really healthy will mean they get a better rate. While this is true in most cases, when it comes to an enhanced annuity, having a medical condition can actually work in your favour. As a medical condition may shorten your lifespan, could mean you are entitled to a much higher retirement income than someone who is of good health.
What is an enhanced annuity?
Enhanced annuities are designed for those of you who lead a certain lifestyle or have a medical condition that will essentially shorten your lifespan:
- Heart conditions
- Kidney failure
- Some minor health conditions such as asthma and high cholesterol can also qualify for an enhanced annuity, depending on their severity.
This is not a definitive list, as over 1500 medical conditions on their own or in combination, qualify for an enhanced annuity. To determine whether your personal condition qualifies for an enhanced annuity, the provider will probably assess you using a common quotation form and most of the time, a full medical examination is not needed.
However, in the case of uncertainty, taking a medical could prove to be a wise move, as it could be the difference that entitles you to a higher income.
As a provider, a shorter lifespan means you won’t have to be paid as long and essentially, your pension fund is used up quickly so you will have access to more money. You are paid more each year than you would be on a standard annuity because your illness or lifestyle choice signifies to a lender that you probably won’t be alive for as long as someone who is healthy and active.
How will you benefit from an enhanced annuity?
An enhanced annuity means you will have access to more money every year because the provider assumes you will not live as long due to your lifestyle habits and/or medical conditions. As the name suggests, enhanced annuities are a better version of a standard annuity because you get more money over a shorter period of time.
Things to consider
The more serious your condition is, the more income you are likely to be entitled to, so it’s important that you are honest and open when it comes to disclosing your medical information as you could be entitled to more than you think.
The date of your illness diagnosis and any treatment you receive(ed) will affect your policy, for example, some serious medical conditions will have a lower enhancement as time passes from initial diagnosis. This is particularly evident with some forms of cancer.
Why choose us?
Not all providers offer enhanced annuities, so it can be difficult to know where to start. At My Pension Expert, we have access to all of the providers you will need and from there, we can find the best fit for you – taking all the hassle of finding the right provider off of your hands.
Thanks to the independent and transparent nature of our advice, all our customers enjoy bespoke annuity quotations specifically matching their personal circumstances. We’re not tied to specific pension products and we use our unique technology to provide the best value deals in the marketplace, including lifetime and fixed term annuities.