Answered by Tom Conner
If you have any sort of health condition, such as cancer or heart disease, then you are likely to qualify for an enhanced annuity, which may pay you a higher income than you would receive if you had no medical issues. Enhanced annuities are also sometimes known as ‘impaired life’ annuities.
The reason enhanced annuities pay a higher level of income is because if you have health issues which could reduce your life expectancy the annuity companies will have to pay you an income for a shorter period of time than they would if you were in the peak of health.
Qualifying for an enhanced annuity
You don’t have to have an immediate life-threatening condition to qualify for an enhanced annuity. You should also be eligible if you have diabetes, high blood pressure or are a smoker for example. You could also qualify for an enhancement based on your occupation and your location. When buying an annuity it’s therefore always worth checking whether you might be qualify for an enhanced deal, as this could significantly boost your income in retirement.
If you have a very serious health condition and are not expected to live for long it may be a better option to consider taking a lump sum from your pension and leaving the reaming funds invested for your beneficiaries.
If you are unsure which option is best for you then it may be worth speaking to one of our pension advisers. An adviser can talk you through both options and gain enhanced annuity quotes for you.
Frequently Asked Pensions Advice Questions
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