Are you one of the estimated 200,000 pensioners in line for compensation for being sold the wrong kind of annuity? Or could you benefit in the future from knowing how enhanced annuities work?

If you, like most of us, tend to be a “half glass full” sort of person when filling in details of your medical history, you could be doing yourself out of thousands of pounds in annuity payments.

The fact is, that insurance companies are quite prepared to offer “enhanced annuities” to those with a health condition that could impair their life expectancy. But whereas only 20% of annuities are currently enhanced, industry estimates are that up to 60% of us could qualify for at least some enhancement.

The news that Prudential and Standard Life have agreed to look again at hundreds of thousands of policies, some dating back to July 2008, has put the issue back in the spotlight.

This comes in the wake of an investigation by the Financial Conduct Authority (FCA), which concluded that up to 48% of those sold annuities by these two companies were provided with “insufficient information” to make an informed decision on the annuity they eventually purchased.

Many could have qualified for enhanced annuities, which would have paid up to £240 a year in pension income, the FCA estimates.

So if you are considering purchasing an annuity, could you get a better deal?

The FCA say that 58% of those who buy an annuity do so from their existing provider – rather than shop around.

It is a competitive market out there if you know where to look. And if you have been a smoker, or experienced an array of conditions like diabetes, heart disease, cancer or high blood pressure or obesity, then the “silver lining” is that you could well qualify for an even better deal – as long as you provide the correct information!

To see how each option would impact on your future finances register for one of the RetireEasy range of LifePlans and, if you want to have the ability to save and compare the different outcomes, opt for LifePlan Premium which will also give you live share, bond and fund values (provided by Morningstar) to keep your LifePlan automatically up to date.