Annuities Explained Impaired Life Annuity

Impaired Life Annuity

Impaired life annuities offer a better annuity rate for people who are suffering from serious conditions that may reduce their life expectancy.  These work in a similar way to an enhanced annuity, yet are designed to offer increased annuity rates to people, who are suffering from more severe and possible life threatening, medical conditions. It is estimated that around 30% of people who take out an annuity could qualify due to their health; however they often miss out as they feel that they do not qualify and therefore don’t ask the question.

Health Issues

Impaired life annuities offer lots of advantages for people suffering from health issues. Providing a higher level of income than standard annuities, a higher proportion of annuity providers are now offering these annuities. This is increasing competition providing better deals, and a better chance of finding one that matches your individual needs. As with standard annuities, it is always best to do lots of research. It is strongly advisable to consult an independent financial advisor prior to purchasing an annuity, giving you the best chance of getting the best deal for you.

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Once you have satisfied the annuity providers that your medical conditions are likely to affect your life expectancy, there may well be conditions attached to the annuity which offer a disadvantage against the flexibility of standard annuities. You will have to provide medical evidence to back up your claims.

Life Expectancy

Unfortunately annuity providers don’t offer much compassion in their working out. If your medical conditions mean your life expectancy is very short they will happily pay you more per month as they feel they will have to pay you for a shorter time.

It is worth consulting an independent financial advisor. If you feel you only have a few years to live you may find a guaranteed payment annuity, which will pay your estate more over 10 years than you would be paid, all be it at a higher rate over a shorter period via an impaired life annuity, before you died.

Lump Sum Purchase

Impaired life annuity rates can also be purchased by people using a lump sum, (as opposed to a pension fund), to purchase an annuity. This can take the form of either a purchased life annuity or an Immediate Care Annuity, sometimes known as long term care annuity. Illnesses that account for this type of impaired annuity are things such as cancer and diabetes that can be potentially ‘life threatening’.

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