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Thank you for the time you took to answer my concern. You have raised excellent questions, some of which I will have to call for answers.

The principal does get reset to current principal value.
Dividends and fees were not mentioned by the sales person. Do most annuities have separate fees attached.
I don't know the quality and yield of the bonds.
I really got nothing to fully explain any of this, just a paper to sign and give how much I want to put in.
The major selling point was that I would never lose the principal I invested, which has happened to me with some mutuals.
I will further research before investing. Thanks again.
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