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What is an Impaired Life or Enhanced Equity Release Plan?

By Mark Gregory on February 18th, 2012

There is no denying the fact that an impaired life or enhanced equity release plan sounds a little cold and cruel – after all, the actuaries at the insurance companies have number crunched their statistics to come up with a more attractive plan if you are able to prove that you’re less likely to live as long as the average person. However, just for once in this world, this is a type of financial plan that could definitely work in your favour if you are in poor health – now how often does that happen?

 

Bearing in mind that the standard equity release plan will be based on an average life expectancy (of say around 80+ years of age), standard plans presume that the client will remain within their property for a certain number of years. Therefore, the equity release UK company will have to wait until the clients have either passed away or moved into permanent residential care before they are able to finalise the plan and reclaim their equity in the property.

 

If you qualify for the impaired life equity release scheme you would prove to the equity release provider that you are unlikely to remain within your property for such a long period of time and therefore the lender would be able to finalise the plan more quickly. This is where more favourable rates and payouts may be available to an applicant for an impaired life equity release plan and this can even be around 30% more advantageous.

 

Applying for an impaired or enhanced equity release plan is only slightly more involved than the standard lifetime mortgage or home reversion plan; you will be required to complete a short health & lifestyle questionnaire that asks if you have ever been diagnosed with certain medical conditions. At the end of the application, if it is presumed that your life may be impaired, you could qualify for a much bigger lump sum from your equity release plan.

 

Just as it is possible to use an equity release calculator to ascertain the expected level of payout for a standard policy, so too can you use this tool to work out what level of payout would be available for an impaired life equity release plan. However, these impaired life equity release calculators are not always entirely accurate. This reason being is that some enhanced equity release lenders such as more2life have varying degrees of enhancement. This is due to the severity of the ill-health the applicant maybe experiencing. The greater the number of illnesses, the greater the potential equity release tax free lump sum.

There are very few times in this life where ill health can actually deliver a better financial reward, but with impaired life equity release schemes from the likes of: –

  • AVIVA  – Lump Sum Max plan

 

If you can get past the actuaries working for these equity release providers and would really appreciate some much needed cash at the moment, investigate the possibility of such an impaired life plan and get out there and start living your life to the full.

Equity Release Supermarket has access to impaired or enhanced equity release schemes. These come with exclusive offers such as free valuation & cashback deals. To receive a enhanced equity release quote or product factsheet please complete our contact form.

 

To evaluate whether you qualify why not call the equity release team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

 

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