."..most of the distribution is the insurance company giving you your money back (or the principal of some other person who didn't outlive you)"

Although you imply this is a fault, in fact the redistribution of funds to survivors is a valuable aspect of pooled annuity or "tontine" schemes.

This is because no one knows exactly how long they will live. Therefore each individual faces two problems: (1) running out of money, or (2) dying rich.  However, when funds are pooled among a large group of people it is possible to predict average mortality and assure income to survivors.