Life With Guaranteed Term

DEFINITION of 'Life With Guaranteed Term'

An annuitization-method option with which the annuitant chooses to receive regular income payments that are guaranteed to last the rest of his or her life but also guarantees income payments for a minimum number of years (the term) following the start of the annuitization period - even if the annuitant dies before the end of the term.

BREAKING DOWN 'Life With Guaranteed Term'

This annuitization-method option guarantees you a lifelong retirement income but also removes the risk associated with an early death, in which case you would lose the value of your contributions to the annuity account. However, compared to the annuitants who have the standard life option (without guaranteed term coverage), annuitants who choose this option generally receive smaller income payments as a price paid for the added safety.

RELATED TERMS
  1. Life Option

    An annuitization-method option for a typical annuity offered ...
  2. Period Certain

    An annuitization-method option with which the annuitant selects ...
  3. Guaranteed Minimum Income Benefit ...

    A type of option that annuitants can purchase for their retirement ...
  4. Annuitization Method

    A type of annuity distribution structure that gives the annuitant ...
  5. Joint Life With Last Survivor Annuity

    An insurance product that, when annuitized, makes payments to ...
  6. Annuitization

    The process of converting an annuity investment into a series ...
Related Articles
  1. Retirement

    Introduction To Annuities: Basics of Annuities

    In the introduction, we learned about the history and purpose of annuities. In this section, we will explore the mechanics of these contracts and the basic characteristics that apply to all forms ...
  2. Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

    Learn about this popular retirement tool, its pros and cons and how annuities work to create a guaranteed regular stream of retirement income.
  3. Retirement

    Is Annuitization Your Best Strategy?

    Annuitization has traditionally offered annuity owners a stream of income they cannot outlive, but there are some disadvantages to this form of payout. Consider alternatives, such as income-benefit ...
  4. Products and Investments

    An Annuity Lowdown for Investors and Advisors

    Knowing how annuities work starts with an explanation of what each part is. Here is a list of terms that cover the basic aspects of annuities.
  5. Annuities

    What annuities are: Insurance products that provide a source of monthly, quarterly, annual or lump sum income during retirement. Pros: Tax-deferred growth of earnings; no annual contribution ...
  6. Bonds & Fixed Income

    How to Use Annuities for Retirement Income

    We explain how to use annuities for guaranteed income in retirement.
  7. Retirement

    Buying Annuities in a Low Interest Rate World

    Learn if buying an annuity makes sense in a low interest rate environment. Also discover the different types of annuities and how interest rates affect them.
  8. Options & Futures

    Selecting The Payout On Your Annuity

    Make sure you understand your options for withdrawing your funds from this complex instrument.
  9. Products and Investments

    How to Hedge Longevity Risk with Annuities

    Many Americans are looking for guaranteed retirement income that will last as long as they will. Here's how immediate annuities do just that.
  10. Financial Advisors

    Immediate Annuities: What To Watch Out For

    Immediate annuities can provide substantially higher monthly payouts than other fixed-income instruments, but also have some key limitations.
RELATED FAQS
  1. What happens to my annuity after I die?

    Understand the different types of annuity payment plans and what payments or additional benefits are payable to your beneficiaries ... Read Answer >>
  2. How are variable annuities taxed at death?

    Find out how variable annuities are taxed after the death of an annuitant, including an explanation of the various payment ... Read Answer >>
  3. In the separate account of a variable annuity, which of the following characteristics ...

    The correct answer is b. When the holder of a variable annuity contract annuitizes the contract, he/she is asking that the ... Read Answer >>
  4. What should my 85 year-old mother do with a deferred annuity she purchased in 1992?

    Retirement of the plan is May 2016. She had a one time investment and has never taken money out of the plan. ... Read Answer >>
  5. What is the difference between a fixed and variable annuity?

    Understand the difference between fixed, variable and indexed annuities, and read a brief summary of their respective risks ... Read Answer >>
  6. How does a company obtain a bank guarantee?

    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center