Buying An Impaired Life Annuity Without An IFA

masonj3

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Hi

My dad is looking at his retirement options and its likely that he will choose an impaired life annuity.

Can anyone advise if it is possible to arrange and buy such a policy without using an IFA? I appreciate its complicated etc but if a person had shopped around and really researched everything thoroughly is it possible to do?

In our position my dad is unwell !! impaired mental awareness and physical ability} so its difficult for us to get to see IFAs etc so we were thinking if I could do most of the research and answer the easy questions for him , could I actually go the whole hog and find that suitable policy for him to purchase?

Thanks x

dunstonh

Can anyone advise if it is possible to arrange and buy such a policy without using an IFA?

Virtually all the impaired life or enhanced annuity providers insist on the use of an IFA agency.

I appreciate its complicated etc but if a person had shopped around and really researched everything thoroughly is it possible to do?

I'm not sure how you could have shopped around as many of the major providers in this area will not quote direct to public so you would be leaving them off.

In our position my dad is unwell !! impaired mental awareness and physical ability} so its difficult for us to get to see IFAs etc so we were thinking if I could do most of the research and answer the easy questions for him , could I actually go the whole hog and find that suitable policy for him to purchase?

Get the IFA to come to him/you or do it postal/internet. The latter may be better as you can fill in the paperwork.

masonj3

Thanks for that was just a thought - we havent actually looked into anything specific as literally just starting to explore this. Have never used an IFA and prospect of it seems daunting although not sure why. LOL

Will try as you suggested initially perhaps with some online / postal contact with an IFA at first and see what stems from there

One final question my dad is 62 and has two private pensions but with different providers. The larger of the two is available for him to cash in at anytime but the smaller one isnt available until he is 65. !!140k & 35k]

Although he has ill health he is not terminally ill , as he is most likely going to have an impaired annuity {subject to acceptance etc } would it be better to wait until he is 65 and take both policies and lump sums and then combine the two into one annuity?? Hope that makes sense

Really appreciate ur time / help etc
Thanks again x

dunstonh

Have never used an IFA and prospect of it seems daunting although not sure why. LOL

Shouldnt be and remember its basically a no cost option for you because those providers that do quote direct keep the commission for themselves that they would pay an IFA if you used one.

Although he has ill health he is not terminally ill , as he is most likely going to have an impaired annuity {subject to acceptance etc } would it be better to wait until he is 65 and take both policies and lump sums and then combine the two into one annuity?? Hope that makes sense

Thats too specific really to answer on a forum. It depends on whether the money is needed or not and what type of annuity he buys (or drawdown even or annuity with buy back/value protect option). Also, dont assume that the pension has to be taken at 65. A lot of pensions that used to have a specific age have had the t&cs amended to allow earlier retirement.

EdInvestor

masonj3 wrote: »

Can anyone advise if it is possible to arrange and buy such a policy without using an IFA? I appreciate its complicated etc but if a person had shopped around and really researched everything thoroughly is it possible to do?

It's difficult.However you could gather some information via these sites:

https://www.fsa.gov.uk/tables (look at enhanced annuity rates)
https://www.justretirement.co.uk
https://www.h-l.co.uk
https://www.annuitybureau.co.uk

Bargain hard on how much commission they will charge you.

You may want to look at income drawdown for part of the money.

dunstonh

www.fsa.gov.uk/tables (look at enhanced annuity rates)

I dont know what use they will be as enhanced and impaired health are priced on personal situation. Unlike standard annuities. So, how do they quote a price?

www.justretirement.co.uk

Who are a very good annuity provider but only transact through IFAs.

www.h-l.co.uk
www.annuitybureau.co.uk

Both of whom are IFAs but neither gives any discounting or advice through their internet distribution arms.

EdInvestor

IMHO it's time people started to protest about the advisor monopoly on annuities and the information blackout on impaired annuities. :mad:

It's a particularly bad product to be subject to this, as once bought, there is no comeback and we are talking about remaining lifetimes of 30 years or more.


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dunstonh

IMHO it's time people started to protest about the advisor monopoly on annuities and the information blackout on impaired annuities. :mad:

It's a particularly bad product to be subject to this, as once bought, there is no comeback and we are talking about remaining lifetimes of 30 years or more.

There is enough choice for a small sample of providers if you want to go direct. The fact that IFAs can do it possibly cheaper and offer more companies is not something to complain about.

I would have thought that because it is a subject that is a "once only" decision that getting advice makes more sense, not less.

Its upto the wholesalers (the insurance companies) how they retail their products. If they chose to make them available through IFAs only (effectively the retailers) then so be it. if they chose to retail direct then thats fine as well.

However, the problem is that many cannot afford the cost of regulation and compliance to operate a direct distribution arm because you massively increase your costs if you do that. With annuities being a low profit area in general there isnt the scope for many of the companies to do that.

whiteflag_3

EdInvestor wrote: »

IMHO it's time people started to protest about the advisor monopoly on annuities and the information blackout on impaired annuities. :mad:

It's a particularly bad product to be subject to this, as once bought, there is no comeback and we are talking about remaining lifetimes of 30 years or more.


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what rubbish

the fact that they are compilcated is the reason why people need advice!:mad:

btw whats the huge saving to be made by going DIY on annuities?

Yet again costs seem to be more important than putting in place a robust financial plan.

EdInvestor

How difficult is it to understand flat rate annuities?

We hear that commission on impaired life annuities can be as much as 3%, same as income drawdown and up to 1.5-2% on bog standard annuities.

Guess what, all the advisors strongly oppose any change.

I wonder why? :mad:

dunstonh

We hear that commission on impaired life annuities can be as much as 3%, same as income drawdown and up to 1.5-2% on bog standard annuities.

oh dear. God forbid someone earns money for doing the job they are employed to do. Much better to allow the consumer to go direct and get same or worse terms but allow the insurance company to keep the fee paid to the adviser. The consumer wont be able to haggle the annuity rate, will have no FOS protection and wont know if they are getting the best product or not but thats much better than someone else being paid.