The problem with guaranteed annuities is that once you have bought them you cannot change them. You are stuck with the rates that were available at the time and also if you were fit and healthy at that time you will have bought your annuity rates based on fit and healthy annuity rates.
Yes you can buy all the usual options with guaranteed annuities such as guarantee period, escalation of payments each year, spouse pension to name a few, but the fact is you cannot change the annuity rate you bought. So what if you could? What advantage would that be?
Fixed term annuities are fairly new in the UK but have been around for many years in the US.
How do fixed term annuities work?
When you purchase a fixed term annuity you are purchasing the annuity rate for your age, sex and health at that time. At the end of the fixed term the annuity provider will give you a guaranteed fund and you can then purchase a new annuity for another fixed term, but this time your annuity rate will be based on your age, sex and health at that time. So for instance if your health has deteriorated then you could buy your annuity based on poor health rates and not fit and healthy rates.