Weighing cigars

SallyG

http://www.moneymarketing.co.uk/pensions/alan-lakey-an-enhanced-annuity-experience-to-forget/1065681.article
Anyone else experienced this sort of shilly-shallying after getting an annuity quote ?
I thought annuity quotations were "guaranteed".................

mania112

the rate is guaranteed, but the rate is applied to the results of underwriting.

dunstonh

Quotes are guaranteed depending on the information supplied being correct. It clearly was not correct. Insurers do suffer from people telling them porkies on purpose or just incorrect information in error.

He was given a rate based on information that proved to be wrong.

SallyG

http://www.dailymail.co.uk/money/pensions/article-2288737/Some-pensioners-losing-1-400-PER-YEAR-spies-snoop-health-records-severing-payouts.html


Don't providers of enhanced/impaired annuities do medical checks before issuing a quotation?

dunstonh

on't providers of enhanced/impaired annuities do medical checks before issuing a quotation?

No. The cost of doing that would be too high and impact on the annuity rate. Think about a dozen or so providers writing to the GP and paying the GP each time you wanted a quote. Crazy situation.

In most cases, they accept what the person says as being truthful. However, they will write the GP or carry out tests post application on a random sample or where there are inconsistencies.

The Mail article is its usual pro consumer style but remember that these are people that have effectively lied to the insurer. Some may be accidental but many will be on purpose hoping they get away with it. Also, the article contains errors. For example it says:

For example, a doctor might have out-of-date records on a patient’s smoking habits, or ambiguous wording on the annuity form can lead retirees to make accidental errors.

The annuity providers dont go to the GP for smoking amount. They carry out a cotine test.

Worse, a saver who suffers such a rate cut is locked in for life with that same insurer, since government laws stop someone who has bought an annuity from shopping around again.

That is also incorrect. There are no such laws. In 2006, the rules were changed to allow annuities to be undone. However, that comes at a cost and it is optional. Most providers have not offered that functionality.

And here is an example why someone shouldnt do it themselves:

Antoinette Kellard lost out at the hands of insurer LV, formerly known as Liverpool Victoria. The 62-year-old, from Hornchurch in Essex, has been a smoker since 1992 and says she still smokes ‘at least ten a day’.
She wrote down these details when she shopped around last March for an annuity on her pension pot of just over £100,000.
LV offered her £5,475 a year — 25 per cent more than its standard deal.But a month later Mrs Kellard was picked for a spot-check.

LV are not good on smoker rates. How she ended up choosing LV is unknown but it does suggest she either went direct or used a limited panel.

Another reader, Terry Stringer, 63, had to wait nearly three months for his pension after falling foul of a spot-check.
He filled out an application form in November, detailing his three-a-day cigar-smoking habit, asthma and raised cholesterol.
Mr Stringer, a former electrician from Hertfordshire, signed up with Just Retirement to whom his £93,000 pension pot was sent.
But in its probe, the company found Mr Stringer’s asthma was classed as ‘dormant’ by his GP.

The forms as how often the medication is used. Its dosage and frequency. This would suggest frequency and perhaps dosage was not supplied to get the quote.


I find the enhanced annuity providers go out of their way to try to get everything disclosed. They frequently follow up the common quotation form that IFAs use asking for clarification on points or further information. I suspect that people going DIY are failing to supply as much or guess and that is where it falls down. I know its not exactly the same but one life assurer pulled offering its product direct to public because it found that the mistakes on DIY applications were too high. Also worth noting that many of the enhanced providers only offer their products via intermediaries. Their forms and documentation is designed to be completed by intermediaries who in turn are qualified to complete these. Some of the DIY distribution channels dont do anything to help people who want to DIY by explaining the forms or what is required.

Velcro_Hotdog

SallyG wrote: »

http://www.dailymail.co.uk/money/pensions/article-2288737/Some-pensioners-losing-1-400-PER-YEAR-spies-snoop-health-records-severing-payouts.html


Don't providers of enhanced/impaired annuities do medical checks before issuing a quotation?

No it would take to long and cost to much

Enhanced quotes are based on the medical information supplied to them by either the client direct or through a third party. If the client decides to go ahead and accept a quote and apply for that annuity the insurer will then approach the GP whilst completing the set up to confirm the medical details provided are accurate.

GhIFA

A complete non-story from the Mail (there's a suprise). Headline should actually be "one pensioner loses £1,400", but guess that wouldn't rate too highly on the scaremongering would it!

It doesn't actually explicitly say that the reduction is down to the smoking issue - and as previously mentioned, this isn't info that they would normally check with the GP. In addition, I would be amazed if an increase of 25% on the standard rates was offered on the basis of 10 cigarettes a day. Don't think they're quite painting the full picture.

Of course, what the story doesn't cover is people who's rate has been increased as a result of underwriting, but I expect that would bring a bit too much balance to it.

As for the photos they've used..........!!!

dunstonh

I would be amazed if an increase of 25% on the standard rates was offered on the basis of 10 cigarettes a day. Don't think they're quite painting the full picture.

Good spot. 10 a day with no other issues qualifies you for about the lowest uplift you can get.

Headline should actually be "one pensioner loses £1,400"

Or people that dont tell truth get paid what they should have been paid if they told the truth.

quotememiserable

GhIFA wrote: »

A complete non-story from the Mail (there's a suprise). Headline should actually be "one pensioner loses £1,400", but guess that wouldn't rate too highly on the scaremongering would it!

It is the Daily Mail's mission to make all their readers abandon their pension plans and be paupers in their retirement. Once a week, their readers lose several thousand pounds from their pensions. Over the course of a working life they lose roughly £5million each.