Enhanced Annuities - not just for 'ill' clients

Ask a retiree if they consider themselves healthy, and they’ll probably answer 'yes' … even though they may be taking ongoing medication or have previously had a medical condition. Because their condition is considered ‘under control’ or ‘not a problem’, they could end up missing out on potential income.

Don’t take “yes” for an answer.....

When asking your clients about their health always scratch beneath the surface. Information on current or previous medications and outpatient hospital visits could be indicators of previous medical and lifestyle conditions that may affect life expectancy and could result in an enhanced annuity rate.

These sample case studies demonstrate the type of cases that could typically qualify for an enhancement:

Linda

Linda suffers from Ulcerative Colitis which was diagnosed more than 5 years ago. On first discovery, Linda was hospitalised for a partial bowel resection. Linda now has to take regular medication to control her condition. With enhanced underwriting based on this condition, Linda’s case could qualify for up to a 30% enhancement over a typical annuity rate.

Scenario is based on a female aged 60 with a fund value of £40k. Quoted Single Life, monthly in advance, nil guarantee, level and no Value Protection. Correct as at 26/11/09. Typical OMO rate sourced from The Exchange 26/11/09

Peter

Peter was diagnosed with Haemochromatosis (iron overload) over a year ago, and requires special treatment such as blood letting. With enhanced underwriting based on this condition, Peter’s case could qualify for up to a 22% enhancement over a typical annuity rate.

Scenario is based on a man aged 65 with a fund value of £40k. Quoted Single Life, monthly in advance, nil guarantee, level and no Value Protection. Correct as at 26/11/09. Typical OMO rate sourced from The Exchange 26/11/09

Anne

Anne had broken another bone through a minor fall, as a result of her osteoporosis, a condition which can affect 50% of people over the age of 75 in the UK and for which Anne takes calcium supplements. Anne’s condition and medication mean that she could qualify for an enhancement of at least 8.2% over a typical Open Market Option.

Scenario is based on a woman aged 65 with a fund value of £40k. Quoted Single Life, monthly in advance, no guarantee, level and no Value Protection. Correct as at 04/01/10. Typical OMO rate sourced from The Exchange 04/01/10

Susan

Susan has stopped taking sugar in her tea and started taking more exercise since her GP had instructed her to lose weight, (Susan is one of the 20% of individuals in the UK described as ‘obese’). With an enhanced annuity, Susan could receive an additional 8.2% in retirement income over a typical Open Market Option.

Michael

Michael has had a mild form of Asthma since he was a child. But even though Michael’s asthma doesn’t restrict his daily activities and is well managed, he could still qualify for an enhanced annuity of at least 7.4% over the typical Open Market Option.

Scenario is based on a man aged 65 with a fund value of £40k. Quoted Single Life, monthly in advance, no guarantee, level and no Value Protection. Correct as at 04/01/10. Typical OMO rate sourced from The Exchange 04/01/10

Richard

Richard used to smoke 30 cigarettes a day but stopped recently on the advice of his GP – Richard has Claudication, a condition that causes severe leg cramps and limits his mobility to walking less than 100 yards. His condition and history could mean that he could qualify for an enhanced annuity of at least 7.4% over the typical Open Market Option.

Christopher

Christopher has Rheumatoid Arthritis, and over time has developed painful joints in both his hands. He takes prescribed medicines to reduce the inflammation. Christopher’s condition and treatment mean that he could qualify for an enhanced annuity of between 7.5% and 11% over a typical Open Market Option.