What is an enhanced annuity?

I’m not in particularly good health and a friend said I may be better off with an enhanced annuity. What exactly is it and would it be appropriate for me?

Question asked by Shanique Bourne
Need Pension Advice?
Call us on 02084327333
First Name

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.

enhanced annuity
ill health pension
impaired life annuity
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Start your journey today...
  Find out how a Drewberry financial adviser can help you reach your destination by making the most of your finances.
Call us on 

Frequently Asked Pensions Advice Questions

I have a number of private pensions and I’m thinking of just consolidating them all into one....
I have a couple of company pensions from previous employers but I’m not sure how well they are...
I’m thinking about moving my pension to another pension fund and have been given a ‘pension...
I’ve built up a few small final salary pension pots over my working life. They’re not worth...
Need Help? Live chat now and get an instant answer from our Experts...


Our Latest Reviews
David & Elizabeth Evans

Excellent service and product Knowledge... Looking forward to working with Matteo Mockler in the years to come.

Samantha Bedo

Victoria was excellent. Guided us through the whole process and responded to us very quickly. Very pleased.

Daniel Brown

Jake went through each policy in detail and made sure I was getting the correct one for me.

We are rated 4.9/5 based on 1129 independent client reviews.
To read more of our independent client reviews click here →
4.92 / 5 Average
1,233 Reviews
S Lewis
Overall Rating
Dealt with complications professionally and kept me informed of progress and status
Overall Rating
Quick and efficient service
Overall Rating
Sam was very friendly, helpful and it was easy to discuss my policy with him. He also took into account what I was looking for and tailored the plan accordingly.
Overall Rating
Very helpful advisor, quick and professional service.
Overall Rating
Excellent Service & Product Knowledge... Looking forward to working with Matteo Mockler in the years to come. David & Elizabeth Evans