According to Swiss Re the total worldwide longevity risk exposure is $20.7 trillion.

This $20.7 trillion figure is presumably a result of defined benefit pension assets that have not been hedged or insured.

All states have what are referred to as state guarantee funds.  Operated by departments of insurance, guarantee funds are insurance funds that receive contributions from carriers that operate in the state.

The Wall Street Journal reports that sales of indexed certificates of deposit (Indexed CD) have increased 46% during the first five months of 2009.

Industry sales of indexed CDs for the 5 month period were $1.66 billion.  This compares to $1.15 billion for the same period the previous year.

There are several critical differences between indexed CDs or market-indexed CDs and a plain vanilla CD:

Writing in the Huffington Post, CBS MoneyWatch Editor in Chief Eric Schurenberg says he thinks it is time to consider major changes for 401k plans.

His criticisms include:

• 401k plans randomly create winners and losers.
• 401k plans leave people poor.
• 401k plans expose people to longevity risk.

Comments on longevity risk include:

The shame of this is, longevity risk can be insured away by averaging out the risk over an entire population. Every annuity does this. Why not the national retirement savings plan?

Lincoln Financial Group is a diversified financial services organization headquartered in the Philadelphia region. With $178 billion in assets, Lincoln Financial Group has been serving the financial needs of customers across the U.S and the United Kingdom since 1905. The company's goal is to provide comprehensive financial solutions that help customers secure their retirement and manage life transitions. The company's annuity offerings are broad and include fixed annuities, fixed indexed annuities, immediate annuities and variable annuities.

Bankers Life and Casualty Company is today one of the largest insurance companies in the United States focused exclusively on the needs of senior Americans. Bankers services the needs of seniors through a broad portfolio of insurance products including long term care, life, annuities and medicare supplement; a national sales force of professionally trained career agents; and a dedicated group of highly capable home office employees.

American Fidelity Assurance Company family-owned organization providing insurance products and financial services to education employees, trade association members and companies throughout the United States and across the globe. Founded in 1960, it has grown to become one of the largest private, family-owned life insurance companies in the United States. American Fidelity Assurance Group specializes in 403(b) Tax Deferred Annuities, which allow customers to defer from their taxable income, the portion of their salary that is contributed to purchase 413(b) contracts.

Professor James Galbraith provided a keynote address at a recent industry conference sponsored by NAVA—the Association for Insured Retirement Solutions. 

Professor Galbraith comes from the Economics department at the LBJ School of Public Affairs at the University of Texas at Austin.  A Keynesian and an author most recently of The Predator State, Professor Galbraith has been a consistently strong and vocal advocate of government stimulus and intervention in response to the financial crisis.

It really depends on what your overall financial needs are.  It is true that a certificate of deposit or CD is insured and less costly than an annuity, but an annuity and a CD serve very different financial purposes.  With a CD, inflation risk, longevity risk, and reinvestment risk likely need to be considered.

A more effective way to approach this question would be to consider what your overall financial needs might be.  In addition, consider your feelings about investing in the market, how much income in retirement will you need, etc.