Thanks so much for the replies. I'm a new Fool, started investing through BuyAndHold a few months back. Nice to know that annuities are good for some people, especially given her investing style (absolutely does not want to take risks). Her annuity account has zero upfront costs and annual charges. Her returns are minimum 4% and this year it's 6%.

TTRoberts, what did you mean when you said:
"The main drawback of the annuity is that if she never uses it before she dies, it doesn't get the step up in basis that CD's would (the same goes for the other tax deferred positions)."

And do you think she should take her 10% every year and invest it some place else or dump it back in a CD? Or just leave it in there in the annuity account to earn the minimum of 4%?

Rosie