Standard annuity rates are calculated with reference to the average life expectancy for people living in the UK. This is fine for those in good health, but not so good for those who have below average life expectancy.
An enhanced or impaired life annuity pays a higher income because an allowance is made for any medical conditions which might reduce life expectancy
You will probably qualify for an enhanced annuity if you can answer yes to one of the following questions:
Lifestyle annuities take into account certain behavioral and environmental factors, as well as medical factors to determine if you have a reduced life expectancy. Any factor that may reduce life expectancy may be considered. These include:
These pay out more than lifestyle annuities for those with medical condition that may significantly reduced life expectancy. The following medical conditions will be considered:
There is no real difference between enhanced and impaired except the way that quoatations are arranged. For enhanced the insurance company will only use the information provided on the medical details form whereas for an impaired life annuity the insurer will require a medical report from your doctor, but you do not need to have a medical examination.
Serious ill-health commutation will be available to anybody who's life expectancy is considered to be less than 1 year. Providing the benefits are below the lifetime allowance the lump sum will be tax free.
There are three ways in which you can apply for an enhanced annuity