Smokers Annuity
An Enhanced Annuity for Smokers
What is an enhanced annuity?
An enhanced annuity may be issued when a client submits a medical report stating that he or she has a reduced life expectancy due to illness.
In addition to the illnesses that you might expect like cancer, stroke or heart attack, now some companies are offering enhanced or higher payment annuities for smokers who meet certain guidelines.
How do you apply for an enhanced annuity?
Along with your application, you submit a short medical report outlining the medical problem and prognosis. In many cases, no full medical exam is necessary.
What are the advantages of an Enhanced Annuity?
- Guaranteed periodic income
- Higher payments than a conventional annuity
- Worry-free money management
- Shelter from market fluctuations
- Protection from Assuris against the financial failure of the life insurance company
What are the health impairments that may qualify for an enhanced annuity?
- Cerebral vascular accident (stroke)
- Myocardial infarction (heart attack)
- Multiple Sclerosis (M.S.)
- Dementia/Alzheimer's disease
- Paraplegia
- Cancer
- Parkinson’s disease
- Diabetes
- Aortic aneurysm
- Emphysema
- Cirrhosis of the liver
Ordinary Annuity versus Enhanced Annuity
A 70 year old male received an enhanced annuity quote for his $100,000 capital. About $100 more a month than an ordinary annuity quote.
His ordinary annuity rate qualified him for $545.84 a month but the enhanced annuity rate guaranteed him $644.25
This extra $98.41 a month or 18% more income made it very worthwhile for him to file a medical report.
Is proof required to obtain a smoker annuity?
Yes, a urine sample is required. Your smoker status is typically confirmed through a cotinine test (urine or saliva) with thresholds set by the insurer.
An Enhanced Annuity is also known as:
- Essential Care Annuity
- Impaired Annuity
- Age Rated Annuity
- Adapted Annuity
- Accelerated Annuity
- Smoker Annuity
How are the best annuity rates determined for smokers?
Canadian insurance companies do not simply apply a flat “smoker bonus” when pricing an enhanced annuity. Instead, they use a health-based age rating system. This means a smoker may be treated as several years older than their actual age, which increases the guaranteed lifetime income paid by the annuity.
Typical health-based age ratings for male smokers
| Smoker Type | Typical Smoking Profile | Health Based Age Rating |
|---|---|---|
| Light Smoker | Occasional or under ~ 10 cigarettes per day | +2 to +4 years |
| Regular Smoker | Daily smoker ~ 10-20 per day | +4 to +7 years |
| Heavy Smoker | Long-term smoker, 20+ per day | +7 to +10 years |
Male Enhanced Annuity Rates
The annuity table compares annual annuity income for non-smokers and smokers. Smoker rates reflect health-based age ratings applied by insurers and are shown for illustrative and comparison purposes only. Based on typical Canadian insurer underwriting practices.
| Age | Non-Smoker Standard rates |
Light Smoker +2 to +4 age rating |
Regular Smoker +4 to +7 age rating |
Heavy Smoker +7 to +10 age rating |
|---|---|---|---|---|
| 50 | $4682 | $4855 - $5029 | $5029 - $5269 | $5269 - $5500 |
| 55 | $5115 | $5269 - $5423 | $5423 - $5709 | $5709 - $6023 |
| 60 | $5500 | $5709 - $5918 | $5918 - $6326 | $6326 - $6782 |
| 65 | $6023 | $6326 - $6630 | $6630 - $7180 | $7180 - $7778 |
| 70 | $6782 | $7180 - $7578 | $7578 - $8222 | $8222 - $8889 |
| 75 | $7778 | $8222 - $8666 | n/a | n/a |
Disclaimer: Annuity rates shown are for illustration purposes only and based on health-based age ratings. Actual annuity income depends on individual underwriting, prevailing interest rates and insurers. Smoking classification and age ratings vary by Canadian insurer. Not all smoking categories are available at all ages.
Female Enhanced Annuity Rates
The annuity table compares annual annuity income for non-smokers and smokers. Smoker rates reflect health-based age ratings applied by insurers and are shown for illustrative and comparison purposes only. Based on typical Canadian insurer underwriting practices.
| Age | Non-Smoker Standard rates |
Light Smoker +2 to +4 age rating |
Regular Smoker +4 to +7 age rating |
Heavy Smoker +7 to +10 age rating |
|---|---|---|---|---|
| 50 | $4540 | $4677 - $4814 | $4814 - $5030 | $5030 - $5252 |
| 55 | $4882 | $5030 - $5178 | $5178 - $5441 | $5441 - $5725 |
| 60 | $5252 | $5441 - $5631 | $5631 - $5987 | $5987 - $6380 |
| 65 | $5725 | $5987 - $6249 | $6249 - $6708 | $6708 - $7201 |
| 70 | $6380 | $6708 - $7037 | $7037 - $7635 | $7635 - $8286 |
| 75 | $7201 | $7635 - $8069 | n/a | n/a |
Disclaimer: Annuity rates shown are for illustration purposes only and based on health-based age ratings. Actual annuity income depends on individual underwriting, prevailing interest rates and insurers. Smoking classification and age ratings vary by Canadian insurer. Not all smoking categories are available at all ages.