Enhanced annuities: By simply making sure that your annuity pays out a higher rate in case of poor health and buying an enhanced annuity you can gain a higher income rate. The principle is simple it works on the basis that if your in poor health there’s a higher possibility that you will have a shorter lifespan than some one in a better state of health. So it offers the facility to take more from your pension fund giving you an enhanced annuity each year and a greater amount of income from your pension.
Your age and your lifestyle affect your annuity rate, so if your currently in poor health then consider an enhanced annuity or impaired life annuity so that your able to unlock extra cash that not all pension providers offer. An Impaired Life annuity is geared towards people suffering from particular health issues these can range from a person with high blood pressure to someone who has had a triple heart bypass. The annuity rate is specific to the individual and most pension providers look at your individual needs and your personal situation. Enhanced annuity however is less bespoke than life impaired annuity and pays a higher annuity rate to individuals with certain lifestyles. Smokers, Obese people are prime examples beneficiaries of enhanced annuity rates and as such the view is taken that these individuals are less likely to reach a very old age. So its estimated that pension providers can afford to pay a higher rate for a shorter period of time to them.
It may not be an entirely positive view on life and death but if you can obtain a better rate from a pensions provider because they are prepared to pay extra due to a lifestyle choice then is it not worth considering ? If your unsure whether your eligible its worth checking with a pensions provider to see if you can get a better annuity rate. If your considering an enhanced annuity or life impaired annuity then its prudent to seek independent financial advice.
We always strive to obtain the best enhanced annuity rates for our clients. If you’ve never considered independent financial advice before or even if you never consider it again. Its wise to take it before you retire because once you’ve made bad decisions with regards to rest of your life and retirement sometimes they cant be corrected later ! Don’t wait for your current pensions provider to automatically contact you, be pro active understand the market, understand your options, receive unbiased independent advice !