The retirement income firm has asked people who have purchased an annuity how truthful they were in declaring health and lifestyle factors. One in 20 (5 per cent) of retired people who purchased an annuity said they either deliberately under-estimated smoking and drinking, did not declare one or more medical conditions or said bluntly they were not at all honest with their provider.
However, up to 70 per cent of people could qualify for better annuity rates because of existing health or lifestyle conditions, with an enhanced annuity paying on average 23 per cent more income than a standard annuity, according to MGM Advantage.
In terms of health, people should tell their adviser everything, from the last time they visited the doctor, to their latest blood pressure and cholesterol readings, as well as any medication they take.
Many annuity providers want to know a retiree's height and weight. "Most of us when faced with this question will use a figure from a few years ago, shave a few pounds off our weight or add an inch or two to our height," says Phillip Bray, an independent financial adviser with Investment Sense.
When it comes to lifestyle, retirees should tell their adviser exactly how much they smoke and drink. "Obviously they shouldn't exaggerate, but avoid the temptation to reduce how much they own up to smoking or drinking," says Mr Bray.
Most married people include a pension for their spouse when they buy an annuity. This means their spouse will be underwritten, too; so the more information given about their health, height, weight and smoking status, the better. "It's not always easy to ask your spouse such personal questions, but it really is worth any potential embarrassment if they get a higher income," says Mr Bray.
