Impaired life annuity sales growth
Sales of so-called enhanced life annuities soared by nearly a quarter to reach a new record high during 2009, research shows.
Impaired life annuities sales have doubled during the last 10 years and totaled 17% of all annuity sales. According to Towers Watson the sales grew form £1.44 billion in the 2008 to £1.79 billion in the year 2009.
life annuities let people convert one’s pension pot into the pension income for the rest of one’s life. Impaired life annuities pay higher rate to people with special medical conditions. They also pay these high rates to those who have negative lifestyle factors, e.g. obese and smokers.
2009 beat the record of enhanced life annuities sales, which means more people are getting higher rates due to their medical conditions and lifestyles.
Tower Watson warns that the popularity of impaired life annuities will have an impact on the conventional annuity rates for those who do not qualify. According to Towers Watson those people’s life expectation will lengthen which should be reflected in the lower levels of the pension plans.