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Certainly a CD gives you your principal back. I don't understand why you say it is not designed to give you your principal back.

It may at maturity but it does not provide the principle as a form of income (or return of investment) during the term of the CD. Annuity can do either if someone desires.

With an annuity, if he dies in one year, his estate will lose $94,000 in value.

No. I don't think you understand how a deferred annuity works. Your comment reflects an immediate annuity with no period certain feature - which is not something the OP mentioned. Annuities can have a death benefit that protects the principle. Such is quite standard for a deferred annuity. If someone wishes to pay an additional fee, than can purchase one that also includes an increasing death benefit.

AIG was too big to fail, and was bailed out by the U.S. government.

Not their annuity business. It was sold/spun off to Western National. Oddly enough, AIG announced plans to buy them back just a few weeks ago.

PSA has no debt and is in a business that is steady in good times and bad. Just my opinion.

PSA may be the next best thing since sliced bread. Great for PSA and anyone that wants to buy it. None of that makes an annuity any better or worse, just different. My initial reply had nothing to do with PSA.

Can we get back to answering the questions of the OP now? If an annuity is indeed a horrible choice for them, wouldn't you rather they be educated on the details as to why instead of the typical knee-jerk reaction, "that's bad, mkay."
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