Aviva annuity higher for specific illnesses
INSURANCE giant Aviva has launched a new annuity product which pays out higher rates to those with specific medical conditions.
An annuity is a product bought with a pension pot that pays out an income for the rest of the person's life. The cost of the annuity depends on how long that person is expected to live and interest rates.
The new "enhanced annuity" product will mean those who suffer from illnesses, such as cancer, a heart condition, or who have had a stroke will benefit from a higher income than he or she would get from a standard annuity.
The income difference could be as high as 30pc, depending on the medical history and age of the applicant, according to Aviva Ireland chief executive Alison Burns.
She said a 65-year-old man, seeking a single life annuity, with a €150,000 pension could expect an annual income of €7,500 from a standard annuity.
The enhanced annuity will give this person an annual income of €9,685, this is 30pc higher than a standard annuity.
She said the new product is expected to shake up the market.
In the UK one in four annuities are on enhanced rates.
As annuity rates vary, it is important for those approaching retirement to shop around and to seek quotes beyond their pension provider, Ms Burns said.
"Buying an annuity is a once in a lifetime investment and the current annuities market has offered little by way of choice or good value to the customer. Aviva wants to shake that up."