This feature of an annuity contract guarantees that the annuitant or their beneficiaries will receive payments for a minimum period, regardless of the annuitant’s lifespan. For instance, if an individual purchases an annuity with a guaranteed period of 15 years, they are entitled to receive payments for those 15 years. If the annuitant passes away after 10 years, the remaining five years’ payments will be made to a designated beneficiary, ensuring that the total value of the annuity is realized.
Annuity Guaranteed Period Example
For example, consider an individual who buys an annuity with a guaranteed period of 10 years for $100,000. They receive annual payments of $10,000. If they die after three years, their beneficiary will receive the remaining $70,000 in payments over the next seven years.