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Impaired health enhancement
This applies to both a pension impaired health annuity and purchased life annuity. In general, individuals that qualify for impaired life rates have a significantly reduced life expectancy (usually less than 5 years to live). It could be that a family have an elderly relative now in a nursing home with a serious illness and they want to protect the estate from the high costs, in which case they can consider an immediate needs annuity.

The leading causes of death in the UK are shown in the table below and therefore anyone who has survived or currently suffering from these conditions can be considered by underwriters for impaired life annuities. These causes of death in the UK account for 81.5% of all deaths for males and females that are over the age of 50 and are as follows:

When considering the income to pay an impaired life the insurance company should use a combination of mortality tables and underwriting guides developed from the mortality experience of impaired lives.

When underwriting an impaired life, some life companies may use the normal mortality tables and enhance the rates by assuming the annuitant is several years older than their current age, such as aged 70 rather than 65, thereby offering a higher income. However, this is not a satisfactory solution and some companies use the Anderton Mortality Tables that base the rates not only on the ageing process but also how the annuitant's life expectancy is going to be affected by the impairment.


Annuity rates table - impaired
These rates tables are for impaired health annuitants. For other rates try;

The following examples are for both male and female single and joint lives, suffering from advanced lung cancer with no spread. The purchase fund is £100,000 and assumes a pension annuity payable in arrears, with 5 years guarantee, no escalation no proportion and for joint a survivors pension of 50%.

The income from the impaired life annuity for a single male or female would provide a gross income of about twice that of a standard annuity, payable for the whole of his life. The joint annuity improves the rate by at least 25%.

Alternatively an impaired life could be used to buy a purchased life annuity. For example, the family of an elderly mother of 80 years suffering from dementia may want to supplement her income. The family have realise a surplus of only £50,000 from the sale of a property and want to purchase an annuity payable in arrears, with no guarantee, without proportion or escalation and no dependents income.

The income from a £50,000 annuity purchase for the impaired life annuity would provide a gross income 2.5 times greater than a standard annuity, payable for the whole of her life. The capital could be used for a purchased life annuity or it could be used for an immediate needs annuity if the elderly mother had to be admitted to a nursing home to receive 24 hour care.


Medical conditions
An individual may have suffered from a number of medical conditions in the past or at present that could mean he or she can qualify for an enhanced or impaired life annuity. Some of the conditions for enhanced rates are as follows:

It may be necessary for the annuitant to have more than one of the above conditions before an enhancement is offered. The following table shows conditions required for the higher individual impaired rates:

This list is not exhaustive and when making an application for an enhanced or impaired health annuity it is important to state all medical conditions in order for the pension income to reflect the expected reduction in the annuitants life expectancy.

General Practitioners Report
Where the annuitant suffers from ill health and is applying for an enhanced or impaired life annuity, it is common practice for the insurance company to request a General Practitioners Report (GPR). They do this to ensure that the details given in the application form are correct before paying the annuitant an income.

When people are younger and applying for life assurance the underwriters could find reason in the GPR to load the premium (increase) if they feel that your medical condition creates a higher risk, and this works against the individual.

However, with an enhanced or impaired life annuity the worse the medical conditions the higher will be the income paid to an annuitant. Where the individual is uncertain of the details of a medical condition because it occurred a long time ago, a GPR can clarify to the underwriters its severity.   Bookmark with: What are these?       resources   annuity pages   annuities   --------- select from --------- our services quotes & enquiries annuity directory your options open market option quote standard quote smoker quote diabetes quote impaired quote immediate needs quote with profits quote purchased life tax free lump sum with profits annuity smoker annuities diabetes annuities impaired annuity long term care immediate needs purchased life annuity annuity rates phased retirement income drawdown other annuity options annuity questions decision tree   --------- select from --------- advance or arrears annuity annuity quotes annuity rates annuity taxation anticipated bonus rate capital and interest capital protection complusory purchase deferred annuity enhanced annuity fixed rate escalation guaranteed period immediate needs impaired life level annuity medical conditions mortality mortality drag mortality profit open annuity open market option pension drawdown phased retirement purchased life RPI escalation single or joint life specialist advice staggered vesting survivors pension temporary annuity unit linked annuity with overlap with profits annuity with proportion   private pensions   pensions in retirement   --------- select from --------- appropriate pension buyout policy carry back relief carry forward relief FSAVC fund value insured pension money purchase pension fund pension term assurance personal pension private managed funds private pension scheme retirement annuity section 226 policy section 32 policy segmentation SIPP scheme stackholder pension   --------- select from --------- annuity annuity interest rate commutation compulsory purchase defined benefits defined contribution early retirement lump sum open market option pension drawdown pension withdrawal pension income phased retirement purchased life annuity retirement benefits staggered vesting tax free lump sum   employer pensions   pension terms   --------- select from --------- accural rate added years AVC approved scheme armed forces pension associated employers bulk transfer continuous service contracted in contracted out defined benefit scheme defined contribution dynamisation early retirement eligibility employer pension equalisation rules executive pension exempt approval final salary pension FURB scheme group pension headroom check hybrid scheme indexation limited price indexation MFR occupational pension public service scheme qualifying service reckonable service refund contributions relevant benefits revaluation salary sacriface SDC scheme SSAS temporary absence UURB scheme Winding up   --------- select from --------- concurrent membership contributions contributory scheme critical yield gross net contributions members pension rights non contributory normal pension age pension audit pension arrangement pensionable service pensions pensions review polarisation reduction in yield regular contributions retail price index retirement age scheme member state pension age tied agent