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NU sees potential in impaired annuities

Norwich Union is moving in to the impaired-life annuity market, believing the sector is set to grow significantly.

It has been piloting a product since March with specialist IFAs, but says it is now ready for a wholesale launch from June 24.

NU says it can provide underwriting on a case-by-case basis. The product is aimed at people whose life expectancy has been shortened as a result of ill health, such as cancer, heart attack or a stroke.

It believes the awareness of impaired life annuities is still low, having found that although one in 10 people could qualify for impaired-life products, only one in 20 takes up the enhanced rates on offer.

The product has a minimum purchase price of £50,000 after tax-free cash and can be taken out on a single or joint-life basis. It also has the option for a five-year or 10-year guarantee.

This is the second initiative from NU in the annuity market in recent weeks. It is due to meet the Treasury next week to get approval for its money-back guarantee annuity.

Spokesman Ian Beggs says: “Impaired life is a area that we have stayed outside of until now but, with the economic climate of low interest rates and low investment returns affecting rates, we think it is time to move in to it. We expect significant growth in this market.”

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