Nice, but lump sum would be better.
If you had (after tax) 1,000,000.00 and put it in tax free munis, AAA rated, insured 3.5% coupon at par, non call, 40 year maturity, you would get $35,000.00 a year tax free.
THat is ALOT more than $25,000.00 the "annuity" gives you.
After 40 years of tax free coupon payments, you make $1,400,000.00. If you spent NOTHING, and just compounded the coupon payments and then the 1mm bond matured, you would have $2.4mm tax free.
Anyone who choses to take the annuity is an idiot. If they don't get to make that choice, I would cross my fingers that the insurance company is still around and/or honors its agreement in the next 40 years.
The disclaimer at the end of the episodes make no mention of, that I recall, of a lump sum alternative. I would not be surprised if the winners of a lot of “contests” be they “kick the football through the uprights at halftime” type or “find the one in ten million soda can or potato chip bag” type are forced to take money doled out over a long time.