Enhanced annuity sales exceeded a billion pounds in the second quarter of the year, according to research by Towers Watson.
Figures revealed first half sales were £1.99bn in total, an increase of 39% over the same period in 2011. Total sales reached about £3b in total during 2011.
The survey covered nine providers of enhanced annuities: Aviva, Canada Life, Just Retirement, Legal & General, LV=, MGM Advantage, Partnership, Prudential and Reliance Mutual.
Andy Sanders, senior consultant at Towers Watson, said: "Exceeding £1bn of sales in a quarter is yet another landmark in the enhanced annuity market."
Towers Watson found more than 20,000 consumers benefited from higher pension incomes because their medical condition or lifestyle had been assessed.
The firm added consumer interest in enhanced annuities would continue and had the potential to reach a wider-cross section of the population.
Sanders added: "Despite the latest record level of sales by volume, enhanced annuities are still only around 20% of the total annuity policies sold. The current range of medical conditions and lifestyle factors that can lead to enhancements suggests a greater proportion of retiring consumers could benefit.
"Looking further ahead into 2013 and beyond when gender neutral pricing of insurance products is in place, the use of individualised underwriting based on health and lifestyle related factors may gain further traction as retirees strive to make the most of whatever pensions savings they do have."
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