Annuity Guarantee Period
Most annuities are typically purchased from pension funds when people use the capital which they have accrued over their working lives and buy a guaranteed income stream for the rest of their lives. In return for the guaranteed income with a conventional annuity you give up all rights to the capital so in the event of your death there is no return of capital to your estate. There are some exceptions to this - lifetime annuities provide unless An annuity provides assurance that you will receive an income for the remainder of your life, even if the total amount of annuity you receive exceeds the amount of money you have saved towards your pension.
What is a Annuity Guaranteed Period?
An annuity guarantee period is an option which may benefit you and your family if you die shortly after converting your pension into an annuity plan. If the unfortunate does occur and you die before many annuity payments have been made, your loved ones will benefit from the annuity plan.
The guarantee period is an option you have when you buy your annuity and is set normally for a period of five to ten years. If you die within the guarantee period, your family or whoever you specify in your will, will receive the annuity payments until the guarantee period is complete.
This type of annuity protection plan serves as reassurance that if you die before the end of the guarantee period, that your loved ones will recieve a financial payment. Despite its obvious advantages in providing for your family after death, there are some disadvantages to any annuity plan with a guarantee period. The main one being is that protection of this kind will be costed into the annuity at outset - effectively it is a form of insurance.
If you are unsure of which annuity plan to choose, it is advisable to speak to a professional finance advisor about which annuity plan applies to your personal circumstances. See the service below.