Norwich Union, the UK's leading insurer, is planning to bring about a reduction in the minimum purchase price for an enhanced annuity from GBP20,000 to GBP10,000 opening enhanced rates to an additional 15,000 people.
Norwich Union is also planning to increase remuneration for advisers from 1% to 1.5% to reflect the additional work that can be associated with enhanced annuity applications. The company is also planning to increase the range of covered conditions to include certain lifestyle conditions. Conditions such as high cholesterol, high blood pressure, smoking and diabetes may now affect annuity rates.
Scott Brown, head of annuities at Norwich Union, said: The average size of a pension used to buy an annuity is currently GBP26,000 and taking a tax free lump sum will bring this amount down further. We want to ensure that in as many cases as possible, customers can benefit from an impaired annuity contract.