Guarantee Period

The period for which income is guaranteed on a life annuity. Because annuities are irrevocable, this is a method of ensuring a reasonable return of capital in the event of premature death. For example, if a 65 year old purchased an annuity with no guarantee, there would be no benefit on death, even if they died the following month. If they had a ten year guarantee, the income would continue to their beneficiaries for the remainder of the ten years.