The findings show that people are missing out on this because they’re not taking advantage of the higher rates that come with enhanced annuities if they suffer from a medical condition. Worryingly, according to the survey, 59% of people aged 55 and over claim they have or have had a medical condition that could qualify them for an enhanced annuity.
Only one in four people are aware that they could get more income when they retire if they suffer from certain medical conditions.
It seems people are not sharing their results with their annuity providers. For example, about 35% of people surveyed have had high blood pressure or high cholesterol, which requires treatment or management by a medical professional. Something like this would be considered for a higher level of income by an annuity provider.
If people don’t mention any underlying health issues, they could risk losing out financially.
For the first five years of retirement, for example, the difference between the amount paid out by an average standard and enhanced annuity is £3,823.50 for a man buying an annuity with £50,000, and £3,407.65 for a woman.
Health condition that will be considered for an enhanced annuity & Percentage of people 55+ who have suffered this medical condition (required treatment by a medical professional)
High blood pressure 40%
High cholesterol 30%
Heart diseases (mostly angina and atrial fibrillation) 13%
Diabetes 11%
Stroke 7%
Heart attack 7%
Chronic obstructive pulmonary disease (COPD) 6%
Breast cancer 4%
Prostate cancer 3%
Source: MGM Advantage, June 2010
In some cases, declaring a ‘medical impairment’ could result in an individual being thousands of pounds better off and make a real difference to their quality of life.
Having a health check before purchasing an annuity is important. If someone discovers they have a medical condition, it’s best to inform their prospective annuity provider.
To ensure you are getting the best annuity rate possible, you should also always shop around for the best enhanced annuity rate for you.
