L&G rolls out Annuity Plus to all advisers

Legal and General (L&G) is rolling out its Annuity Plus to all advisers following a successful pilot last year.

The simplified enhanced annuity focuses on the five most common health risks affecting the retiring population; smoking, diet-controlled diabetes, high blood pressure, high cholesterol and high or low body mass.

It will be offered via an automated "fast-track" application involving a simple, two-page questionnaire focusing solely on the five named health risks, meaning advisers will receive an instant decision for their customers.

Annuity Plus also offers a potential uplift to retirement income of up to 15% if under the maximum rate, compared to the L&G standard rate.

Other examples of potential uplift under Annuity Plus are up to 7% extra income for a male smoking 10 cigarettes a day for the last 12 years, up to 8% annually for a female with diet-controlled Type-2 diabetes and up to 15% for a male who has been smoking 15 cigarettes a day for 18 years and has diet-controlled diabetes.

A male aged 65 with a £30,000 single life annuity would receive a five year guaranteed level income of £2,095 under the Annuity Plus, compared to £1,937 under the standard annuity.

Around 120,000 retirees will miss out on around £60m of additional annual income this year by not arranging an enhanced annuity, research by L&G suggests.

It attributes this lack of appetite for enhanced annuities to the "complex and drawn out" application process.

Tim Gosden, head of annuity product development for L&G's individual annuity business says; "Independent research we conducted highlighted that the current enhanced annuity process can be complex and time consuming.

"In the UK, half of people aged over 65 have high blood pressure and by answering just four very simple questions this could result in an uplift of up to 15% in their retirement income."