Look, join the real world. If he wants a guaranteed 5% with someone on the hook to guarantee it, then that's an annuity, and he can kiss his principal goodbye. With an annuity, the insurance company gets to keep whatever is left when he dies. Some have limited rights of survivorship, but the principal is toast with almost all annuities. If he wants to keep his principal, he's going to have to join the rest of us in taking a litte risk, not a lot of risk, just a little. If he wants a stable 5%, he probable will have to draw down a little from his principal each year, or else invest in a more risky mix. Regardless, with a million to work with, he should be fine for life so long as he doesn't withdraw more than $40K a year, with a cost of living adjustment each year. When he dies, he should have more than his starting principal, but that's not guaranteed. Again, he must be in a good low fee, no load equity mutual fund, with a portion in fixed asset.