Guards can be very powerful and if you have no other choice but to fight one you could be rewarded if you are able to take one out like money or a cosmetic item. The item can show other players how powerful you are as you were able to take out a guard (or at least landed the final blow). One example of a cosmetic item could be a title saying something like [Guard Killer]. I know that not many guards are on which could make this even more formidable, let me know what you guys think.
Not a good idea in my opinion. If a guard engages in combat with you it's most likely because you were doing something wrong, and not for their personal gain. If you do manage to kill a guard it seems like a way of saying you're resisting arrest almost. If a cop is trying to arrest you would you try and kill him too? If you can make a reason killing a guard should warrant a gift then I'll think it's a good idea; for now I think it should be worse punishment for killing a guard.
Okay thank you for your criticism, I completely understand, it should not be encouraged to kill a guard and theoretically should be punished. Maybe a wanted level or system where if you kill a guard you become wanted which could result in a bounty on their death to encourage other players to bring him to justice. Again just a concept.
That idea sounds like a lot of fun, much better than the previous one. I would like to see that system put in place, bounties are fun in my experience and are more engaging however they encourage a more hostile community. That would be fun to see put in place though.