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Editor’s Note: This is a guest post by Ivan Harrison, a personal finance enthusiast from London.
Annuity rates can be confusing business. Aside from the fact that the rates vary according to age and gender, the same person could get different rates from a number of different providers. So just what does affect the rates you could be offered?
Annuity rates are based on your life expectancy. Men typically have shorter life expectancies than women and are therefore typically offered higher rates.
Smokers could be eligible for specialist “smoker” annuities or enhanced annuities, depending upon how much they smoke and for how long they have been doing so. Again, this relates to the fact that smoking is related to a high number of potentially life threatening illnesses and medical conditions.
Again, those who regularly exceed the maximum recommend alcohol intake are potentially eligible for certain enhanced annuities. Again, this comes down to the link between excessive drinking and a host of medical conditions.
Postcode!This might come as a surprise, but there are even providers who will now vary rates based on your post code. This is related to the fact that extensive research has indicated that people living in certain, often poorer, areas of the country are likely to have a shorter life than those living in more affluent areas of the country. As such, some providers have now started to take this into accounts and offer higher rates to those living in areas where the life expectancy may be lower.
There is a comprehensive list of medical conditions, ranging in severity, that can influence eligibility for enhanced annuity rates. If you have any medical condition at all, it is worth enquiring with an expert as to whether or not you might be able to get the higher rates.As with any financial product, the best bet is to always research the market, seek professional advice and be sure you’ve shopped around before making any final decisions.
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