So here's the thing with annuities that I feel a lot of people are missing (maybe they aren't, but that's my impression), and the mathematician in me can't take it any longer. Many posts have put in this (false) built-in assumption that "you'll be lucky to even get your principal back," that in no circumstances would buying an annuity be better than just keeping your own principal and putting it in CD's or cash, that you're just giving away your principal for a ridiculous low return, and similar arguments.
The thing is, no one knows if it's a bad or good purchase for themselves, individually, unless they have a magic crystal ball that tells them exactly when they'll die. Sure, you might die early or at your statistically expected life span, in which case the insurance company has made a decent profit off of your principal. But you might outlive your lifespan by many years or decades, in which case you got to take the insurance company for an expensive ride on their dime.
Of course the actuaries at these companies have worked it all out so that by knowing the statistical expected lifespans of the population at large, they can afford those people who outlive their expected life span. For as many that die later, an equal number will die earlier. And on top of that, they have built in a healthy profit margin plus making money by investing your principal (hopefully for a better return than they are giving to you, from their perspective). Since they have pooled the risk across so many customers, it's a very safe bet that they will make out nicely overall, and the fact that they have been around for hundreds of years is a testament to the longevity of this business model.
But it is patently false for anyone to say it's just a guarantee that you'll be worse off by purchasing an annuity. You could have a life expectancy of 80 years and live to be 100, in which case the insurance company has lost a significant amount of money on you (i.e., you won). It's almost like a bookie -- they've taken an equal number of bets for each team and built in a cut so they make out no matter what. But that doesn't mean no one ever makes a winning bet with the bookie. Statistically speaking, about half the people "win" against the insurance company and get more in return for their principal than expected, and another half get less by dying early or when "expected." The insurance company just gets their profit margin on top of all of it, so everyone's satisfied.
So for the last time it's not necessarily about being lazy, incompetent, stupid, overly risk-averse, and so on. It can be a reasonable way of purchasing a guaranteed rate of return that will pay out for life, and you won't know if you made an overall optimal choice until/unless you know the exact date of your death.
YMMV.