My agent told me that if I died when the market was down, my heirs would get at least the amount of money that I had put into it even if the annuity's actual value had dropped. Insurance agents often use the death benefit as a selling point to persuade you to buy an annuity. Of course, there's always a chance you could keel over during a serious market downturn such as we've experienced recently. There's also the problem of fees. In other words, the researchers found that insurers were charging five to 10 times more than the most optimistic estimate of what the death benefits were worth.
Annuities can be a reasonable investment for some people in certain situations.
But many planners will tell you that the death benefit has little economic value to most investors, and shouldn't be overemphasized in the decision-making process. Search the archives of the Los Angeles Times for similar stories. You will not be charged to look for stories, only to retrieve one.