This also applies if you have suffered a serious illness or have a preexisting health condition.
You may qualify for an “impaired life” plan with more generous terms, so make sure you reveal your habits or health conditions in full.
Annuity income lasts for as long as you live, so the lower your life expectancy, the more generous insurers are going to be.
When determining how much income to give you, insurers will consider a number of factors including your weight, alcohol intake, smoking habits and any prior health problems.
Serious issues may result in an impaired life annuity, which can give you between 5 and 20 per cent more income.
A 65-year-old with a £100,000 pension pot who drinks only occasionally could get income of around £5,471 a year, but that would jump to £5,750 if they drank a fairly boozy 24 pints of beer a week, giving them an extra £279 a year.
Hargreaves Lansdown senior pension analyst Nathan Long said someone imbibing three bottles of wine a week would get an extra £96 a year.
They would get £441 more if they also suffered from health problems such as high blood pressure, high cholesterol and obesity.
Growing numbers of Britons now shun cigarettes, but those who continue to smoke will at least benefit from more generous annuity income, because insurers recognise that their life expectancy is markedly lower.
Long said: “It pays to disclose all of your health information when applying for an annuity, or use a broker to help you find the one that will maximise your income.”
If you are considering raising cash in retirement against your property using an equity release scheme, you also have a clear financial incentive to disclose any health issues.
Dean Mirfin, chief product officer at Key retirement Solutions, said smokers or those with health problems can generate a lot more money from an impaired life scheme.
A 70-year-old with a £300,000 property could typically generate £128,395 from a standard plan: “However, if they smoked, were overweight and had high blood pressure, they could get £142,595, or £14,200 more.”
The capital and interest on an equity release loan are repaid from the proceeds of your property sale when you die or go into long-term care.
The shorter your life expectancy, the sooner the equity release company can expect to get its money back, allowing it to offer you better terms.
Mirfin said a good equity release adviser could help you find the right plan: “There are few times when poor health or habits work to your advantage, but this is one of them.”
Illness or an unhealthy lifestyle go against you when taking out life insurance and other forms of protection such as critical illness cover, as you will pay higher premiums.
Emma Thompson, head of customer care at insurance advisers LifeSearch.co.uk, said alcohol intake makes little difference unless you are a heavy drinker: “Even as much as 30 to 35 units a week will have little impact, but it is a different matter if you have had liver function tests, been advised to reduce drinking or have a drink driving conviction.
“Consumption above 50 to 60 units a week could result in an automatic decline.”
Smoking has a far greater impact.
A 45-year-old non-smoker in good health would pay around £80 a month for combined life and critical illness cover, but this could almost double if they smoked.
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