Following the introduction of the smoker enhanced rates, in 1996 life companies introduced other common life style and medical conditions such as diabetes that have seen an increase in occurrence in the UK population.
There are different types of diabetes that carry different risks and this affects the enhanced rates offered. the three categories are as follows:
Diabetes controlled by diet;
Non insulin dependent diabetes;
Insulin dependent diabetes.
The highest risk is insulin dependent diabetes as this can result in related diseases of the kidney, eyes, heart and poor circulation. There are also degrees of insulin dependent diabetes requiring the individual to take insulin between one and four times a day, or more in extreme cases and this coupled with other medical conditions can decrease life expectancy and therefore increase the annuity rates offered by life companies.
Annuity rates table - Single Life; Diabetes The following pension annuity table is for a 60 year old male, showing the best diabetes enhanced open market option income for a compulsory purchase annuity, from a pension fund of £100,000, after the tax free lump sum has been taken and on a level basis. The annuity is paid in arrears on a single life and does not include a guaranteed period.
Diabetes enhanced annuity
Annuity Type
Gross Income
Diabetes enhanced annuity
£7,110
Standard highest annuity
£6,160
Standard lowest annuity
£5,560
Annuity table - the annuity rate shown above is based on a purchase price of £100,000 and should be used as a guide only. For an annuity rate specific to your circumstances you should ring us on 01480 45412.
The income from the diabetes enhanced annuity would provide the annuitant with a gross income 2.5 times greater than a standard annuity and 3 times greater than the lowest rate payable for the whole of his life.
Medical conditions If you suffer from other medical conditions in addition to diabetes, you could be entitled to further enhancements offered from an impaired health annuity.
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:
Medical conditions for enhanced rates
Regular cigarette smoker
Heart Attack
Multiple Sclerosis
High Blood Pressure
High Cholesterol
Digestive or Bowel Complaint
Dementia
Diabetes
Chronic Asthma
Stroke
Cancer - lung, breast, bowel, pancreatic, liver
Overweight
Bladder or Liver Complaint
Emphysema
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:
Medical conditions for impaired rates
Secondary malignant cancers
Some primary malignant cancers
Chronic Lung Disease
Motor Neurone Disease
Stroke with ongoing support for normal daily living
Parkinson's Disease
Chronic heart disease
AIDS
Kidney disease with ongoing dialysis
Hodgkin's Disease
Multiple Sclerosis, permanent wheelchair support required
Alzheimer's Disease
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.
