Honest health and lifestyle answers can help get better policy terms
10 November 2019
New rules have been introduced to encourage pension savers to fully disclose their health and lifestyle information that could enable them to secure higher retirement incomes.
The rules commit financial firms to ask health and lifestyle questions and use that information to generate a market-leading quote.
According to retirement specialist Just Group, retirees seeking to turn their pension into guaranteed lifetime income must be completely honest about their health or risk missing out on the best rates.
Stephen Lowe, group communications director, Just Group, said: “People seeking secure retirement income should be prepared to answer questions about their health and lifestyle or it could be costly. This is not the time to be shy or embarrassed to talk about your medical history, current state of health, give personal details such as height and weight and talk about lifestyle including smoking history or alcohol consumption
“We now have such sophisticated techniques for gathering and processing information on a host of factors that nobody is average or standard. The details make a real difference to the amount of lifetime income available. Saying ‘I’ve never felt better’ is not going to give the insight needed to find the best deals.”
According to research by the Financial Conduct Authority, between 39%-48% of pension savers buying a guaranteed income for life from their own pension provider may have been eligible for higher rates due to health history or lifestyle factors.
“Having an accurate idea of how much guaranteed income for life you can generate from a pension provides a good baseline for all other non-guaranteed options to be considered,” added Lowe.
Lowe said of the nearly 75,000 guaranteed income for life plans sold in the 12 months to March 2019, less than two in five (38%) were offered enhanced rates due to health or lifestyle factors, significantly below the two-thirds Just Group’s own research revealed could be eligible.
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