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The penalty would be avoided if you can meet an exception. When you make a withdrawal from an annuity, the IRS assumes that earnings are withdrawn first. The 10 percent penalty applies to the earnings portion of a withdrawal.
One exception is for medical bills. The amount of unreimbursed medical expenses (>7.5% AGI; , 10% if under age 65) can mean no 10% penalty at least on that portion of the earnings withdrawn.
You cannot move it to a ROTH to avoid tax unfortunately.