What Does Life With Guaranteed Term Mean?

Similar to the life-option, this term refers to a certain annuitization-method. After the start of the annuitization period (just like in case of a life option), the annuitant will receive income payments periodically for the rest of his or her life. However, this product provides its beneficiary with more security due to its guaranteed term. So as an extra guarantee the insurer secures a regular payment that will be given to the beneficiary until the ‘term’ ends no matter if the annuitant dies before that period. This guaranteed term lasts for a predefined number of years.

Life With Guaranteed Term Explained

The option of ‘life with guaranteed term’ secures one to have a lifelong fixed income after one’s retirement, with not carrying any risk of losing the value of one’s insurance payments in case of one’s early death.

This extra financial guarantee is obtained with accepting to get smaller insurance payments after the guaranteed term is over in comparison to those who have a regular life option. These people get higher payments, but they don’t have guaranteed term coverage. So you can choose between getting and risking more, or having an added security.