What is a primary feature of an impaired annuity?

An impaired annuity is specifically designed for individuals with health issues. This type of annuity recognizes that those with impairments or significant health concerns may have a shorter life expectancy compared to the general population. As a result, it offers more favorable terms, including higher payouts, to account for the increased risk involved. This feature makes the impaired annuity particularly attractive for people who may not have access to standard annuity products or who would receive lower payouts if their health were factored into the pricing.

The other options do not align with the primary characteristics of impaired annuities. For instance, while some annuities may guarantee returns, not all investors receive benefits based on factors outside their health. Furthermore, impaired annuities often consider the health status of the individual when determining payment amounts, making guarantees contingent on this rather than universal coverage for all conditions. Additionally, there isn't typically a long wait before payments begin; in many cases, these annuities start providing payouts relatively quickly due to the targeted demographic they serve.