A. While insurance companies always take care of themselves, annuities don't always flavor them, even in this poor interest rate environment. The reason is simple - when purchase an annuity, you are also competing with other people on life expectancy, therefore if you outlive the other insurance companies' customers, you will have a better return.
Example: if an 85 year old male has a life expectancy of 92 according to the Social Security Administration, but this person has a very healthy life style and could live to age 96, then those extra 4 years could yield a great return for this purchaser. Basically, when purchasing an annuity, one trades longevity risk (do I make it to 96?) for market risk (will stocks drop?).