What exactly is an enhanced annuity? You've probably guessed that it's a bit better than a normal annuity but how exactly?
An enhanced annuity can pay you a better income than a normal annuity, as it takes into account your lifestyle as well as your medical and occupational history.
Importantly, enhanced annuities are priced according to your specifications, so it may consider some or all of these factors:
• if you are overweight
• if you smoke
• your previous occupation (if you have worked with asbestos for instance)
• if you've had a previous or current health problem that could limit your life expectancy (such as a heart attack or high blood pressure)
• your postcode (life expectancy can vary quite a bit, depending on where you live)
While all of this is unpleasant to think about, you may be able to secure a far higher retirement income by purchasing an enhanced annuity, as long as you are completely honest on your application.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
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