By Rachel Williams The market's second smokers' annuity has been launched by Evergreen Retirement As...
By Rachel Williams
The market's second smokers' annuity has been launched by Evergreen Retirement Assurance.
Requiring no medical underwriting, the product has a quick and simple underwriting process, helping smokers secure a better income when they retire.
The product, Enhanced Pension Annuity, was devised by Mike Fuller, chief executive at Evergreen Retirement Assurance, who was also behind the original smokers' annuity launched in 1995 by Stalwart Assurance, now GE Life. Evergreen is backed by Britannic Assurance.
While the products are similar, Fuller said that the new product does reach a larger audience.
He added: "We have a customised medical library of 3,500 conditions, 1,000 of which would probably allow someone to qualify for an enhanced level annuity."
Unlike the GE Life Plan, the Evergreen product features three tiers that allow people with poorer health to qualify for better rates and higher incomes.
Smokers qualify for the Enhanced Annuity, while people with more serious conditions or a combination of conditions qualify for the Enhanced Plus Annuity. Enhanced Special, a fully underwritten annuity, is available for those with extremely serious, life-threatening diseases.
Peter Quinton, managing director at specialist intermediary The Annuity Bureau, said that the launch was excellent news for the market.
"I am extremely pleased to see a new smokers' product on the market. Whenever niche products, such as GE Life's, appear on the market they do not have to be competitive.
"It is good for the consumer as the two will have to compete, so we are likely to see keener rates," he said.
However, Evergreen has raised concerns that consumers are ill-informed of their options when they have to buy an annuity on retirement.
Recent research conducted by MORI reveals that some 20% of people do not know where to buy an annuity and a further 17% believe they are tied to their pension provider.
Fuller said: "Simply by selecting the right annuity, a retired person can improve their income by as much as 14% and could be up to 30% for those with a lifestyle or medical condition.
"This provides a tremendous window of opportunity for intermediary business."
Fuller added that the company was currently looking to broaden its product range, possibly with an immediate needs long term care plan.
"We will be looking at products for people that already need care, and we will also be looking into equity release," he said.
