Adapted Life Annuity

​The Adapted Life Annuity, also called an impaired risk annuity, is designed to meet the needs of your clients who have been diagnosed with a critical illness or whose application for insurance has been refused or approved with an extra premium.

Who is the Adapted Life Annuity for?

The Adapted Life Annuity is for those who have been diagnosed with a critical illness and whose life expectancy is reduced as a result. The payments they receive are higher than conventional life annuity payments, because they factor in these clients’ special circumstances. That’s why an impaired risk annuity is called an Adapted Life Annuity.

With this annuity, your clients can face their illness with dignity and maintain their quality of life.

What steps are involved to process an Adapted Life Annuity application?

Here are the four simple steps:

  1. Send the medical file to the Underwriting department (making sure you specify that the application is for an impaired risk annuity)
  2. Contact the Customer Service department to obtain a quote
  3. Complete the “Retirement Annuity” contract application (no. 1433)
  4. Send the completed application to the Annuity Administration department (indicate that the medical file has been sent to the Underwriting department)

The Underwriting department evaluates the excess mortality rate that applies. This information is then sent to the Customer Service department, which contacts the Actuarial department so that the quote can be prepared. Once the Actuarial department has prepared the quote and the annuity amount has been determined, Customer Service sends you the quote.

How long does everything take?

The Underwriting department analyzes the medical file within 48 hours. The Actuarial department prepares an annuity illustration about 24 hours after they’ve received the excess mortality rate calculated by the Underwriting department.

However, these timelines may not be met if certain information is not provided, such as:

  • The guarantee period
  • The indexation rate (for an annuity indexed annually)
  • The amount of RRQ (Régie des rentes du Québec) and Old Age Security benefits  (for the integrated annuity to age 65)
  • Source of premium: registered or non-registered funds
  • Taxation: prescribed or non-prescribed annuity (for non-registered annuity)
  • Date of first payment and payment frequency

The annuity illustration software doesn’t provide Adapted Life Annuity illustrations.Only the Actuarial department can provide an impaired life annuity illustration, after the excess mortality rate has been provided by the Underwriting department.

The medical file must include complete information on the client’s state of health. The shorter the indicated life expectancy, the higher the annuity amount will be.

You can determine the excess mortality rate from the insurability report produced when a life insurance application is refused.