If you’re asking yourself this question the simple answer is it depends on your illness, it’s severity, and to what extent (if at all) it impacts on your life expectancy. An ill-health annuity (or to give it it’s formal name an enhanced annuity) qualifies the annuitant for a higher rate because it is deemed they will die sooner than someone without any medical conditions / lifestyle choices. Unfortunately, the majority of new annuitants in the UK miss the chance of this additional income because they are not offered or they fail to enquire about annuity enhancement. The main problem is that they fail to shop between providers. Is it estimated that around 40% of all those who enquire about an annuity are eligible for higher rates.
The amount of extra income you will qualify for from an ill-health annuity will depend on your illness (s). For more serious medical conditions such as heart attacks or diabetes you could get over and above 30% extra. These are known as impaired-life annuities. You may be asked to undergo a medical assessment to judge your current state of health which will involve completing an enhanced annuity questionnaire. However, it is not just severe conditions that can warrant a better annuity offer. Less serious conditions such as asthma can also result in annuity increments of up to 10%. In fact there are over 1,500 individual medical conditions which can be considered by the pension provider. If a thorough and forensic examination is made of your state of health, then you may find there is something that will qualify you for higher rates.
The main questions surrounding ill-health annuities or enhanced annuities centre around whether the annuitant smokes heavily, drinks alcohol on regular basis, takes medication and whether they have been hospitalised as a result of any of these. From this the adviser will be able to probe to find out to what extent any of these issues are likely to impact on life expectancy. So if you drink like a fish, smoke like camp fire and are already on medication there is a strong possibility you could be in for higher rates! Some advisers are better at probing than others, so it makes sense to declare anything (past or present) that you feel could be of significance.
