Impaired Health Annuities

What are Annuities?

What are Annuities?

In its simplest form, in exchange for a lump sum payment, an insurance company will pay you an income (an annuity) for a specified period.

How do Annuities work?

There are a number of different types of annuities, but they all work essentially in the same way. In exchange for a capital sum payable by you to an insurance company, you will receive a regular income, the level of which is determined predominantly by your age at outset, whether you require a level income or one that increases year on year, how long the income is payable for and current gilt returns (a type of government debt) which is broadly linked to interest rates.

In addition to this, depending upon the type of annuity chosen, whether you are male or female may have a bearing on the level of income payable to you. Annuities can be payable for your lifetime (as in the case of pension annuities) or for a specified period of time (say, five or ten years) as in the case of non-pension and those annuities used for investment purposes. There is no cash-in value and on your death, generally any annuity will cease.