Annuities are quickly becoming an integral part of any retirement portfolio. They allow for guaranteed income during retirement years and offer consumers the opportunity to ensure financial stability and security during some of the most relaxing and fulfilling years of life. However, it has been estimated that nearly one out of every three consumers could be eligible for an even higher income during retirement. In order to do so, a special kind of annuity must be purchased, an enhanced annuity, and more consumers qualify for this annuity than actually realize it.
An Enhanced Annuity pays out a higher income than a standard annuity for those consumers that are in a poor state of health. They work on the idea that those who qualify will have a shorter life-span than those who are in perfect health. This means that the money in the fund of an enhanced annuity can be paid out quicker and at a higher rate because it is theorized that the length of the fund distribution will be shorter.
An enhanced annuity does require qualifications. These qualifications differ from those that govern an impaired-life annuity. For an impaired life annuity, the consumer must suffer from very particular health problems, such as high blood pressure or cancer. To qualify for this type of annuity, the insurer looks at the consumer’s health in great detail.
For an enhanced annuity, the screening process is far less tailored than that of an impaired-life annuity. An enhanced life annuity can be paid out to those consumers who partake in certain lifestyles, even including those who are obese or smoke cigarettes. The basis for an enhanced annuity is that the consumer is less likely to live a full life, so the insurer can pay out more each year that the consumer is actually alive.
Similar to purchasing any annuity, it is imperative for the consumer to see the advice of an independent financial adviser. For many consumers, especially those who qualify for enhanced annuities, it is simply a lack of information or research that prevents them from following up on potential benefits. Gaining the insight from an insurer or adviser who knows all of the qualifications for each annuity type, including an enhanced annuity, can be extremely worthwhile and financially beneficial for those consumers who qualify and may otherwise be unaware. With many individuals suffering from a variety of different health concerns and issues, there are several consumers who could be currently reaping the benefits of an enhanced annuity.