An annuity is a product that pays a regular retirement income – usually for life – using money from your pension pot. If you’ve been diagnosed with an illness, or have other health problems that could reduce your life expectancy, you might be able to get a higher retirement income. This is sometimes known as an enhanced annuity.
Health conditions that can be covered
Examples of health problems that might entitle you to a higher income include:
- Stroke
- Cancer
- Diabetes
- Heart attack
- Kidney failure
- Chronic asthma
- Multiple sclerosis
- High blood pressure
There are some other health conditions that could also mean you get a higher income.
So if you’re on any prescription medication it’s worth checking with your provider or adviser about whether you’re likely to qualify.
Other reasons for higher payments
You might also be able to get a higher monthly retirement income if you’re overweight or if you smoke regularly.
Some companies also offer higher annuity rates to people who have worked in certain jobs, such as those involving a lot of manual labour, or who live in particular areas of the country.
It’s a good idea to shop around and compare the income you can get from different providers.
Compare rates
When shopping around for an annuity, make sure you disclose all health and lifestyle issues.
A common quotation form is used by most pension providers.
It makes this process easier as you only need to provide the medical information once, rather than repeating it on every provider’s application form.
This common quotation form can be obtained from most annuity providers.
Use our annuity comparison table to compare rates
You can use our comparison tables below to see how much income you might get if you have a medical condition or a poor lifestyle.
The tables also explain the other choices you need to make about your annuity income and how to decide which might be suitable for you.
Get advice before taking out an annuity
Once you take out an annuity you can’t change your mind.
However, it’s just one of several options you have for taking your pension.
So it’s important to be sure it’s the right choice for you.
For an overview of all your options and to find out where to get help and advice, including free government-backed guidance from Pension Wise, see our guides below:
- Options for using your pensions pot
- Understanding what Pension Wise is and how to use it
- Retirement – why should I get advice?
This article is provided by the Money Advice Service.
