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You are wondering what to do after your doctor explains you have a serious medical condition.  Not only is the thought of living out your remaining time, perhaps a bit impaired disturbing,  you and your spouse are wondering how to make your money last.  With the possibility of a future filled with increased medical bills and current yields at record lows,  you fear your savings are going to have to be drawn down to the point of depletion.

A possible solution is the medically underwritten annuity.  When applying for a medical annuity you provide your medical records to the insurance company who will then review them to determine your actuarial age.

After determining  the actuarial age it is compared to your chronological age and if  actuarial age is greater the annuity’s monthly income is increased accordingly.  This adjustment can be done jointly  even if your spouse’s health is good.

It has always been important and more so in this low interest rate environment to make sure a retiree’s savings lasts the rest of their and their spouse’s life.  The effort put into getting quotes on a medical annuity can bring a welcome peace of mind making it time well spent

On the positive side; medical science continues to advance at a fast pace so the initial prognosis could  in the end, turn out to be wrong, in which case you get to enjoy good health and a higher than normal lifetime income stream.

You may ask questions in the comments or contact me privately:

Tim Barton

Chartered Financial Consultant

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6 Responses to Medical Annuities Pay More

  1. Paula on August 12, 2013 at 7:31 pm

    Is a medical annuity good investment,if the patient has allot of health issues?

    • Avatar of Tim Barton
      Tim Barton on August 16, 2013 at 9:16 am

      Yes when a person who has potentially life shortening medical conditions a medical annuity is worth exploring because the lifetime payments would be higher. With advances in medical care it is very possible that person could live much longer than expected. In which case they would receive a larger income for a longer period of time. A medical annuity should contain a cash refund feature so that if any money remains unpaid at time of death those funds would be paid to the beneficiaries.

  2. Gale Bagley on August 22, 2014 at 9:50 am

    Can you convert a regular annuity to a medical annuity?

    • Avatar of Tim Barton
      Tim Barton on August 22, 2014 at 10:19 am

      If payments have not started from an annuity you may be able to transfer to a medical annuity. You contact me via for more detailed personal information.

      • Gale Bagley on August 22, 2014 at 9:54 pm

        Tim, I have two annuities –CONT. DATE 1994
        1-American Legacy (non-qualified )
        single prem. deferred annuity
        cash surrender value $58,488
        death benefits $67,178

        2–Aviva Balance Plus Annuity 12–cont. date 2007
        cash surrender $68,058 (NON-QUALIFIED )
        death benefits $80/844

        • Avatar of Tim Barton
          Tim Barton on August 25, 2014 at 9:13 am

          The American Legacy you purchased in 1994 should be out of its surrender charge period, meaning you may be able to shop for a medically underwritten annuity. However, you listed a death benefit of $67,178 if you transferred these funds to another annuity you would lose this benefit.

          AVIVA allows annuity payments any time after the first year. You could start annuity payments for this annuity. The Balance Plus 12 has surrender charges for 12 years; you have 5 years of surrender charge left. AVIVA, or now Athene allows you setup an income annuity and waives those charges. This would most likely provide you with more income than if you transferred these funds to a medically underwritten annuity.

          I’m not licensed in your state so I can only give you general information. Check with your representative, attorney or other professional advisor for specific recommendations.

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