Which health and lifestyle factors qualify for an enhanced annuity?

13 May 2024

It isn’t often that having a health condition can benefit you financially, but some people find this is the case when arranging their pension annuity. But which conditions may potentially qualify you for extra income with an enhanced annuity?

In the UK, enhanced pension annuities are designed to provide a higher guaranteed income for those who qualify. To be eligible for enhanced terms, you need to have (or have had) one or more qualifying health conditions or lifestyle factors that might impact life expectancy. 

The criteria varies among annuity providers, so we’ve put together the following guide to help you understand how they work and what is typically considered.

On this page:

• How do enhanced annuities work?

• Smoking and alcohol intake

• Very high or low body mass index (BMI)

• High blood pressure (hypertension)

• High cholesterol

• Diabetes

• Cardiovascular conditions

• Respiratory conditions

• Neurological conditions

• Cancer

• Stroke

• Kidney disease

• Liver disease

• Crohn’s disease and colitis

• Other factors of relevance

• Do enhanced annuities require a medical?

• How can I check if I qualify for an enhanced annuity?

If you are interested in an annuity, as part of our annuity guidance service we’ll check if you qualify for an enhanced annuity by asking about your health and lifestyle. Call our friendly team today on 0800 652 1316 or request a free call back here.

How do enhanced annuities work?

An enhanced annuity, or impaired life annuity, is a type of annuity that pays you a larger guaranteed income than you can achieve with a conventional lifetime annuity. This is because providers consider your health and lifestyle when working out how much income to offer you. 

Providers work on the probability that people with certain health or lifestyle factors will have a shorter average lifespan. Therefore, they can pay you more income while you are alive, on the assumption that you may not be taking that income for as long as healthier people. 

To put it another way, providers pay you a higher retirement income to help ensure you still get the full benefit of your hard-earned pension fund. 

But of course, just because a person qualifies for an enhanced annuity does not necessarily mean they will have a shorter than average lifespan. Many retirees who find they qualify for enhanced terms will go on to enjoy a long and healthy retirement - and we certainly hope that is the case for you!.

You can read more about how enhanced annuities work in our guide to enhanced annuities. But here, we’ll look specifically at the health conditions or lifestyle factors that may qualify you for one.

Smoking and alcohol intake

If you smoke or have a history of smoking then you may be eligible for an enhanced annuity. This is because smoking is associated with a higher risk of various health conditions, including respiratory and cardiovascular diseases, which can impact life expectancy.

If you currently smoke, your annuity provider may ask you to take a simple test to confirm your exposure to nicotine, although typically this isn’t required. 

Do you enjoy a bottle of wine or two a week? Your consumption of alcohol may also entitle you to higher rates. 

You’ll be asked how many units of alcohol you drink on average each week. Providers typically assume that one unit is equivalent to half a pint of beer, lager or cider (normal strength),  125ml of wine, or a single measure of spirits. 

Very high or low body mass index (BMI)

A very high body mass index (BMI) or obesity can be considered a health risk, and is associated with various health issues, including heart disease and diabetes. That’s why providers may offer enhanced annuity rates to individuals with higher BMIs. According to the insurer Legal & General, being overweight could boost your income by 10% to 15%.

In addition to being overweight, being underweight with a very low BMI can also entitle you to enhanced terms with some providers. Being underweight may mean someone is at greater risk of health issues such as lowered immunity, and is associated with shorter average life expectancy.

High blood pressure (hypertension)

High blood pressure, or hypertension, is a common health condition that may lead to qualification for an enhanced annuity. 

Elevated blood pressure levels are linked to an increased risk of heart disease and stroke, which insurers will typically consider when determining annuity rates.

High cholesterol

This is when you have too much cholesterol in your blood. There are a range of factors that may cause this condition, such as eating too much saturated fat, smoking and being physically inactive. You are also at risk if you have kidney or liver disease, are overweight, have Type 2 diabetes or have an underactive thyroid.

If you don’t try to lower your high cholesterol, it can raise your risk of having a heart attack or stroke. However, there may be no symptoms of high cholesterol, so you may wish to request a test if you think you might be at risk.

Having high cholesterol has become quite common, yet potentially thousands of over-55s have the condition and do not even know about it. If you suspect that you might have this condition then you should make an appointment with your GP to get checked out - and to receive the correct care and guidance.

Diabetes

Both Type 1 and Type 2 diabetes can potentially qualify you for enhanced terms – and therefore a higher income for life. According to Which.co.uk, having Type 2 diabetes could boost your annuity income by up to 30%.

Diabetes is a chronic condition that may lead to complications affecting various organs, potentially impacting life expectancy. Examples of diabetic complications include heart disease, retinopathy, neuropathy, kidney disease, peripheral vascular disease and amputation.

When you answer health questions when talking to our Annuity Specialists, it will help to have information about your current diabetes medication and the last two readings for HbA1c. If you have ever been hospitalised due to your health condition then you should also provide the dates for that.

Cardiovascular conditions

Over-55s with a history of cardiovascular conditions may qualify for enhanced annuities. For instance, according to the insurer Legal & General, if you’ve had several heart attacks then you could get up to 30% more income with an enhanced annuity.

The following cardiovascular conditions are indicative of potential health risks that insurers may take into account when calculating your annuity rates:

• Heart attacks

• Angina

• Coronary artery disease

• Heart failure

• Heart transplant

• Heart valve disorders / replacement

• Aortic aneurysm

• Cardiomyopathy

• Atrial fibrillation (AF)

• Irregular heart rhythm

• Blocked artery

• Coronary angioplasty

• Coronary artery bypass graft (CABG)

There may be other conditions that an annuity provider will consider, so the above list is by no means exhaustive. 

To help get you the best chance of being eligible, you may be asked how your condition currently affects your day-to-day life, such as breathlessness or episodes of blackouts or dizziness. It will also help to have information to hand about any medication you currently take, treatment that is planned and the dates of any heart surgeries you have had. 

Respiratory conditions

If you have one or more respiratory conditions, then this may be taken into account when determining your eligibility for enhanced annuities. Just some of the conditions that providers might consider include:

• Lung disease

• Chronic obstructive airways / pulmonary disease (COAD/COPD)

• Asthma 

• Emphysema

• Bronchiectasis

• Pneumoconiosis

• Asbestosis

• Pleural plaques

• Sleep apnoea

• Interstitial lung disease

This list is not exhaustive, so be sure to mention any respiratory conditions you have when applying for an annuity to ensure you do not miss out on a potentially higher income. You will also need to provide details of any medication you are currently taking for your condition, and the dates of any hospital admissions you have had. 

Neurological conditions

Certain neurological conditions, such as the ones listed below may qualify you for an enhanced annuity:

• Multiple sclerosis

• Vascular dementia 

• Alzheimer’s disease 

• Dementia

• Parkinson’s disease

• Motor neurone disease

If you have one or more of the above then be sure to mention this. Even if your condition is not mentioned above then it may still be taken into account, so be sure to disclose it.

Cancer

Some types of cancer may lead to eligibility for an enhanced annuity, such as, leukaemia, lymphoma, a growth or tumour. If you have a history of cancer, you’ll be asked about your history, such as the stage, grade and treatment. It will also be helpful if you can provide dates of any surgery or treatment such as chemotherapy, radiotherapy, hormone therapy or immunotherapy that you have had or are due to have.

Stroke

If you have had one or more strokes then you may qualify for a higher guaranteed income for your retirement with an enhanced annuity. When you answer the health questions it will help to know which of the following you were diagnosed with:

• CVA (cerebrovascular accident – major stroke)

• SAH (subarachnoid haemorrhage)

• Cerebral haemorrhage/bleed

• TIA (transient ischaemic attack – mini stroke)

It is worth disclosing if you have any ongoing problems caused by your stroke, such as arm or leg paralysis, short-term memory loss, speech or vision impairments. You should also confirm whether you are currently taking any medication in relation to your stroke history. 

Kidney disease

Chronic kidney disease (CKD) or other significant renal issues may make you eligible for an enhanced annuity. This is because these conditions may be indicative of broader health concerns affecting life expectancy.

According to Kidney Care UK, around 10% of people in the UK have chronic kidney disease. This figure rises to 20% for people over the age of 80. 

Though it is usually mild, having CKD increases your chances of developing other conditions that can be more severe, such as high blood pressure, heart disease, stroke or acute kidney injury. For this reason, anyone with kidney disease should attend regular appointments with their GP to review their condition. 

Liver disease

Older people with liver diseases, such as cirrhosis, may also qualify for enhanced annuities. This is because many liver conditions can have significant implications for overall health and longevity. Below are some of the conditions that may be taken into account by annuity providers when determining your retirement income:

• Alcohol-related liver disease

• Non-alcoholic fatty liver disease

• Hepatitis

• Haemochromatosis

• Primary biliary cholangitis

Crohn’s disease and colitis

Crohn's disease is a chronic inflammatory bowel disease affecting any part of the digestive tract. Similar to Crohn’s disease, Colitis is a lifelong condition where the immune system starts to attack part of the gut. 

Having Crohn’s disease or colitis may qualify you for an enhanced annuity as they are both potentially serious conditions that can affect life expectancy.

Other factors of relevance

The above list is by no means exhaustive and other conditions may qualify you for an enhanced annuity. If you talk to one of our Annuity Specialists about your circumstances, they will ask the right questions about your health and lifestyle to check your eligibility.

You may find that you qualify for enhanced terms even if you have no medical conditions or health issues. This is because other factors such as your occupation history or where you live are also taken into account. 

For example, some postcodes have lower regional estimates of life expectancy due to issues such as crime, pollution and poverty.

Do enhanced annuities require a medical?

In most cases, you will not need to have a medical examination to qualify for an enhanced annuity. Your chosen annuity provider will use the information you provide on your medical questionnaire, and may request to see your medical records in some cases. 

Annuity providers do reserve the right to verify that the medical and lifestyle information you have provided in your application is accurate and true. In some rare cases, they may ask for you to attend a medical examination. 

How can I find out if I qualify for an enhanced annuity?

To find out if you qualify for higher annuity rates through an enhanced annuity, you will need to complete a health questionnaire during the quotation process. To give yourself the very best chance of qualifying, it’s important that you disclose all health conditions, medications and treatments for your provider to consider. 

Remember, some annuity providers offer more competitive rates than others. Our Annuity Specialists will therefore compare annuities from leading providers to see which one offers the most income and the best annuity product to suit your circumstances and needs.

To find out if you qualify and how much income you could achieve, contact one of our friendly Annuity Specialists on 0800 652 1316 or request a call back here.