How Ill-Health Affects Your Chance of Buying an Equity Release

Doctor holding handIt might appear risky to think about releasing equity from your home in the current climate as interest rates remain at an all-time low; however, your ill-health could be the answer to financial struggles by way of purchasing an Equity Release plan.

Contrary to popular belief, ill-health is one way to release funds in order to resolve financial difficulties as your health may have prevented you from working or you’ve been retired on health-related grounds. To be eligible for an equity release plan, you have to be over the age of 55-years old or if you’re considering a joint-plan, both of you will have to be over the age of 55. The more serious your health conditions, the more equity you will be able to release from your home.

Ill-health has previously been a barrier in a number of ways in that life insurance policies have usually cost more in terms of more expensive premiums. An enhanced equity release rate could be yours because of what is considered poor health. There is now your home. With regards to your property, there are valuations to consider, any existing mortgage and the current state of your health. It’s also worthwhile considering any historical medical conditions you may have suffered as these could qualify you to purchase an enhanced equity release plan.

Equity release unlocks the equity in your home and brings you a tax free lump sum or you can draw an amount each month to improve your quality of life. In terms of life-expectancy, any pre-existing or current condition which would reduce your life expectancy, compared to the national averages, will bring higher rates in that your condition or conditions will shorten your life. As more is known about life expectancy due to advanced research, a person who has smoked more than ten cigarettes a day for the last ten years could qualify for a higher rate. Insurance companies have poured over mortality statistics in order to increase rates for those who are suffering from poor health.

It is thought that up to 40% of the population could qualify for an enhanced rate in equity release, yet only around 10% of the population actually do purchase an enhanced rate plan. This is thought to be down to people who don’t want to think about their mortality and admit they have health problems. They’re missing out on some of the best rates around. Your ill-health is the key to increased equity rates and it’s not just current conditions. Any of the following conditions could qualify you for an increased equity release rate:

  • Stroke
  • Heart attack
  • Stable or Unstable Angina (providing there is on-going treatment)
  • Insulin dependent diabetes
  • Certain cancers
  • Parkinson’s disease
  • Multiple Sclerosis
  • High blood pressure

The above is an example of some of the ill-Health conditions that could mean you qualify for increased equity release rates.

Your home could be the key to a healthier financial existence and your ill-health is now no longer a barrier to a higher standard of living and worrying about financial problems as your health worsens. Providing you meet all the requirements and depending on your current mortgage commitments and a valuation on your property could see an increased monthly income or a tax free lump sum sitting in your bank account.

The UK Equity Release market is now fully regulated and has been in operation since 1991. With an ill-health enhancement option, you could be securing yourself an increased income because of your health-related conditions.

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