Personalised GIfL Solutions through underwriting
Many people don’t realise that they don’t have to be ‘ill’ to be able to improve the rate provided by a Guaranteed Income for Life (GIfL) solution.
Underwriting techniques have moved on, to the point that there isn’t really a ‘qualification’ line anymore, and the days of ‘standard’ and ‘enhanced’ annuities are in moving into the past.
Personalised GIfL means using lifestyle information as well as medical conditions to create a picture of the client’s individual circumstances, and tailor an income that is bespoke to them.
HOW UNDERWRITING CAN PERSONALISE YOUR CLIENT'S GUARANTEED INCOME FOR LIFE*
Everyone is different*
As we can see in the chart above, no one needs to settle for a ‘standard’ rate, and even details such as a person’s height and weight, alcohol intake, marital status, and where they live can make a difference.
The following examples, (which are for illustration purposes only), help give some idea of the effect that underwriting can have:
|Laura feels pretty good health wise, and hasn’t been to the doctors for as long as she can remember. She doesn’t take any tablets for any health conditions, and looks after herself with exercise and healthy eating. Laura would be able to get an income equivalent to 4.46% pa.|
|Brian is feeling well, slightly underweight for his height and doesn’t have any health issues. He doesn’t smoke or take any medication. He would be able to achieve an income of 4.74% pa.|
|Graham’s health is generally ok, but not brilliant. He managed to give up smoking years ago, and although he is underweight, he does have high blood pressure and cholesterol. He keeps these in check with medication that he takes every day. Graham’s health and lifestyle means that he would be able to get an annuity income equivalent to 5.29% pa.|
|Pamela’s health is suffering, but she feels that it is mostly under control. She is still active, but has to keep an eye on her high blood pressure and cholesterol for which she takes tablets every day.She was also diagnosed with diabetes about 9 years ago, and as well as taking a daily tablet for this, she has to check her blood glucose levels every day. With underwriting, Pamela’s annuity income would be equivalent to 6.12% pa.|
|Margaret is suffering with her health. She takes tablets for high blood pressure and cholesterol, but it's the more serious condition of Parkinsons that's impacting on her activities of daily living. She has spent time in hospital related to this about a year ago, and continues to take medication for the condition. Because of this, Margaret is able to get an annuity income rate equivalent to 6.76% pa.|
|Richard is undergoing treatment for stage 3 bowel cancer and is quite underweight. Richard’s annuity income rate is equivalent to 7.61% pa.|
Accessing underwriting for your client
There are different ways of obtaining health information for your clients. The most comprehensive and widely accepted is the Retirement Health Form (RHF). This enables basic lifestyle details to be gathered, as well as relevant medical information as applicable.
In addition, the RHF declaration allows the client to provide their consent for their information to be used as part of the Information Prompts requirements.
Underwriting information can also be gathered using quote portals.
Retirement Health Form
The form can be downloaded here: www.retirementhealthform.co.uk
Enter client’s quote details and full health information into your portal of choice.
Complete ‘Personal Details’ and ‘Medical Assessment’ sections, and any medical conditions pages as required.
Hint: Ask if the client is happy to provide a copy of their prescription - This can provide exact names of medications and dosages
Quotes are provided instantly
Hint: Don’t click ‘don’t know’; the portals could make assumptions that provide inaccurate figures
Hint: Complete ‘lifestyle’ details, or some providers could be excluded from the search
Submit to providers – most will respond within 24hrs
Be aware if the rate is ‘indicative’ rather than guaranteed. This might require contacting providers directly for more accurate quotes.
Any requirements for further information for clarity, possibly by the client’s GP will be confirmed.
Don’t forget - for GIfL cases with dependant benefits such as a spouses income, include their health and lifestyle information for underwriting purposes, as it can also impact the rate.
*Illustrations based on an individual aged 65, with a £50,000 pension fund.
Excellent - doesn’t have any health issues.
Good - slightly underweight and doesn’t have any health issues.
Reasonable - slightly underweight, an ex-smoker, and has high blood pressure and cholesterol for which they take 1 medication for each condition daily.
Coping - has high blood pressure and cholesterol, as well as being diagnosed with diabetes 9 years ago. They take 1 medication for each condition daily.
Challenging - has high blood pressure and cholesterol, as well as being diagnosed with Parkinson's 9 years ago. They take 1 medication daily for each condition. They spent time in hospital a year ago, and their activities of daily living are also impacted.
Critical –underweight, have stage 3 bowel cancer that was diagnosed recently.
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