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Id most likely take the annuity. Although it does depend on whether or not I planned on spending that money quickly. Were you to take the lump sum and stick into something like a large cap index fund, it could easily earn more than the annuity could ever pay you merely by virtue of being there in a larger amount for longer. Never underestimate the power of compounding interest.
Although, to do that, you would have to not spend any of it for a good long time. Therefore, I would probably (after doing the calculations to make sure) take the annuity and just invest most of it. Like Hal said, thats still about 500k a year before taxes.
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"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."
--Plato
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