At-retirement solutions

An enhanced annuity enables people who are in poor health to receive a higher regular income in recognition of the fact that they, on average, have a lower life expectancy than a healthy person does. Annuity providers can decide upon the level of automation and the depth of detail in medical underwriting.

Since the mid-90s, primary insurers in the UK have been offering underwritten or so-called enhanced annuities. Tax advantages encouraged people to invest their money in an annuity and most people at retirement did in fact purchase an annuity. In recent years, annuity regulations were changed and the tax incentives were withdrawn. Today, pensioners have complete freedom to either draw down their pension pot, continue the investment or to buy an annuity.

Hannover Re has collaborated with a number of providers to support product development and encourage market growth. The enhanced annuity market is sophisticated and the providers use a common medical questionnaire, the retirement health form.

A number of portals allow independent financial advisers to access information on products and providers, request comparative quotes and transact new business, including online medical underwriting. Customers obtain immediate guaranteed quotes from a couple of providers by simply answering a limited number of questions. Most cases are assessed automatically and only a few complex cases, e.g. rare diseases, require manual underwriting and a general practitioner’s report.

Hannover Re has more than 20 years of experience and expertise in the enhanced annuity market. Our automated underwriting system allows for immediate guaranteed quotes and enables Hannover Re and its clients to enter the market of underwritten annuities on a profitable basis.

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Immediate needs annuities pay a guaranteed income for life to help cover regular long-term care costs in exchange for a single lump sum payment.

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Equity release solutions address elderly people that are “cash poor, but asset rich” – their asset being their home. The idea is to release equity from their home while retaining the right to live there until death or move into a care home. Apart from the right of residence, the beneficiary (i.e., the one who owns the home today) might receive a lump sum and/or regular instalments such as a life annuity.

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The parents protection plan pays an income to parents if they outlive their children. This product is targeted at regions and countries where it is a cultural obligation that children help their parents financially.

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Unit-linked retirement income pays an income for life with investment up- and downsides.

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Since life expectancy has increased globally in recent years, there is a worldwide need for at-retirement solutions.

Our partners benefit from our global expertise in product design and development, actuarial pricing and medical underwriting – and from our flexibility and openness to exploring new ideas.

Over the past years, Hannover Re has held on-site seminars covering different longevity topics in a variety of countries. Recently, we have transformed these seminars into a series of longevity webinars, which we have successfully implemented in Germany, Israel and Spain, among other markets.

If you are interested to find out more, please get in touch with your local Hannover Re contact.