The quoted income you get from an annuity will be better the older you are, because your life expectancy is decreasing. And those in poor health, another type of annuity can bring a dramatic improvement in income.
Impaired life annuities offer a higher income rate to those who have a medical condition that will reduce their life expectancy. Table 6 of our downloadable tables shows how a 65-year-old man with a serious medical problem might be able to more than double the income from a standard annuity. In this example, the person concerned has recently had cancer and is receiving chemotherapy.
This type of annuity is quoted individually, and will require you to provide certification of your condition from your doctor. Conditions that may qualify include diabetes, liver impairment, heart conditions and cancers. A condition such as arthritis, which, though painful and crippling, does not affect life expectancy, would not.
A type of impaired life annuity known as a care fees, or immediate needs, annuity offers very high income yields which can be useful in paying for long-term care needs for elderly investors. The income can be free of tax if paid directly to a care home, and in some circumstances the annuity can be used to negotiate a cap on the cost of care.
Some companies offer special rates to smokers, which will provide a slightly improved income to those who smoke an average of 10 or more cigarettes a day. These are sometimes called enhanced annuities. These are listed in Table 6 of our downloadable tables.
There are also some providers that offer improved rates to people in manual occupations, or those in postcode areas where such occupations predominate.
