I have purchased an annuity within a traditional IRA account. Since I am 70 1/2 years old, I must make a RMDs. The annuity has a life insurance element in that If I die within 10 years the difference between the initial premium and payments to date would be returned to my estate. Also I have the right to withdraw the value of than annuity at any time. Would I pay taxes based on RMDs for the year-end value of the annuity or would the annuity payment itself be the basis for taxation on an annual basis?