Many assume condition must be life threatening to qualify
Many consumers are unaware they could qualify for enhanced annuities as they wrongly believe the products are only available to those with life threatening conditions, according to Partnership.
Research carried out by the provider shows that of the top five conditions with an enhanced annuity, those who have suffered from diabetes, cancer or stroke are most aware they could qualify for an enhanced annuity.
Those with chronic obstructive pulmonary disease and high blood pressure are least aware, despite the fact that of the five conditions, high blood pressure affects by far the most people in the UK at 7.5 million.
An enhanced annuity pays a higher income to those with impaired health.
Nigel Barlow, director of technical product development at Partnership, said while take-up of enhanced annuities is increasing, there is still a lack of understanding as to which conditions qualify.
He said: “Partnership’s data indicates that people wrongly assume that the condition needs to be ‘life threatening’ to qualify.
“It probably also shows that people with less severe conditions are still not volunteering this information to their financial adviser.”
Barlow added that advisers should be asking clients about their medical history during initial discussions and emphasising that declaring all conditions could result in a better retirement income, as he said that too many retirees believe doing so will result in a negative outcome.