Enhanced or Impaired Life Annuities
Overview
Individuals in poor health (or those with a known medical
condition, i.e. diabetes) may apply for higher annuity rates
due to their shorter life expectancy – this is often subject
to a medical examination. Some individuals may be offered
enhanced rates due to their lifestyle or physical condition,
i.e. smokers or clinically obese.
More recent developments have seen the introduction of
Special Situation Annuities, which can be based on
occupation and postcode. For example a bricklayer in
Yorkshire will be given a higher rate than a stockbroker in
Surrey.
In all other respects, these annuities are the same as a
Lifetime Annuity.
Suitability
These annuities are most likely to suit individuals who want
absolute guarantee on their pension payments and are
eligible for the higher rates. They therefore suit
individuals with low attitudes to risk and security,
although they may also be suitable for individuals with a
high attitude to risk but are in ill health.